Take the paneling outside if possible and spray it down with a pressure washer to clean it and remove any peeling paint. If the paneling is indoors and can't be moved, scrub it with a scrubbing sponge dipped in warm water mixed with a few drops of liquid dish soap. Dry the paneling with a towel when you're done and then let it air dry fully before continuing.
Sand the surface of the wood thoroughly with coarse sandpaper to remove the damaged surface and smooth out the wood underneath. Wipe away any loose sand with a rag once you finish.
Apply latex primer to the paneling. Use a paint sprayer for faster results. Allow the paneling to completely dry, which usually takes several hours.
Clean out the paint sprayer and then use it to apply a topcoat of latex paint. This improves the appearance of the paneling while also helping to protect it against delamination in the future. Paint on a second coat once the first dries for best results.
Add an epoxy sealer to the paneling to further protect against water and future delamination. This is especially recommended if the paneling is outdoors and regularly exposed to moist conditions like rain or snow. Follow all application instructions on the container for best results.