Abstract: The wood fibres (WF) were esterified with maleic anhydride (MA) in a mixing chamber. Then the esterified WF (EWF), HDPE and dicumyl peroxide (DCP) were compounded to prepare EWF/HDPE composites through reactive extrusion. The mechanical properties and microstructures of the composites were investigated by Fourier transform infrared spectroscopy (FTIR), mechanical test, scanning electron microscopy (SEM), wide-angle X-ray diffraction (WAXD) and simultaneous thermogravimetry-differential scanning calorimetry (TG-DSC). The results show that, the ester group is successfully introduced onto the WF via the dry process. In comparison with the WF/HDPE composite without compatibilization, EWF/HDPE composites by reactive extrusion show an increase of 112% and 36% in tensile and impact strength respectively. A significantly improved interfacial adhesion, an increase in the crystalline size and crystallinity, but a slight decrease in thermo-stability are also observed for the reactively extruded composites. The mechanism of the reactive extrusion is discussed. It is suggested that the increase in mechanical properties of the composites is mainly contributed to the compatibilization by reactive extrusion, rather than alterations in the crystal structure of HDPE matrix.