The present invention is a new and novel modular raised wall paneling system and method of manufacture that is economical, labor non-intensive, and can be easily constructed for a variety of room configurations and dimensions. The modular raised wall paneling system of the present invention comprises a plurality of individual panel sections having a joint there between, wherein a panel section includes a recess portion forming the appearance of a raised panel thereon. In a preferred embodiment of the invention the panel sections include along opposed longitudinal edges a tongue and a groove such that the panel sections can be disposed in parallel side-by-side mating relationship such that the tongue of one panel section is received in the groove of an adjacent panel section.