Use wood filler before you sand and finish. Use wood putty after the finish is on. Filler hardens, so you can sand, shape and drill it, then stain or paint over it. Putty never hardens. You press it into nail holes and small dings in wood that is already stained and topcoated, and wipe off the excess.

Brands do not use the two words identically, so check the label. Minwax’s two products show the split clearly.

Minwax filler and putty compared

Minwax High Performance Wood Filler Minwax Wood Putty
Sets hard? Yes, a two-part filler mixed with hardener at about 16:1 No: “Will not harden to a sandable surface”
When to use On bare or stripped wood, before sanding and finishing After staining and topcoating: “Stain and topcoat before applying putty”
Working time Workable for about 10 minutes; carvable after about 20; sand after at least 30 No cure time
After it sets “May be sanded, carved, planed or drilled,” then painted or stained Not sanded or stained; color comes premixed to match Minwax stains
Size of repair Larger holes, built up in layers no thicker than 1/8 inch “Minor scratches, gouges and nail holes”
Location Interior and exterior Interior only
Cleanup Solvent cleaner Water

Which to use for common repairs

Repair Use
Nail holes in trim that is already stained and finished Color-matched putty
Gouge or hole in bare wood you are about to sand and finish Hardening filler
Exterior trim, sill or door damage An exterior-rated filler; Minwax’s putty is interior only
Soft or rotted wood Remove loose material and consolidate first. Minwax pairs its filler with Wood Hardener for this.
Damage that affects strength, keeps moving or lets water in Repair or replace the wood; cosmetic filler is not structural

“Stainable” does not mean invisible. Hardened filler takes stain differently from the wood around it. Test filler, stain and topcoat together on scrap, or plan to paint.

Sources