A wood chipper with an air entrainment system. The wood chipper includes a chipping drum in a drum chamber and a discharge fan in a fan chamber. The chipping drum and fan are conjointly driven by a common shaft. The discharge fan draws air from the drum chamber through a chamber air inlet and potentially also from the ambient atmosphere through an external air inlet. The volume of air drawn from the drum chamber is sufficient to offset or overcome the negative air flow created by the spinning drum in the drum chamber to reduce blowback. Air entrained with the chipped material moves toward the discharge chute and away from the material inlet. A deflector may be include near the mouth of the discharge chute to further guide air flow from the fan chamber toward the discharge chute and prevent the backflow of air into the chipping chamber.