The reinforcing effect of resorcinol formaldehyde latex (RFL) coated short aramid fiber on an ester-based thermoplastic polyurethane (TPU) was investigated on the basis of mechanical properties. Short fibers having different fiber length were used for the reinforcement. The exceptionally high Young's modulus and low strain modulus indicate the reinforcing effect of this fiber on to the TPU matrix. It has been observed that fibers of 3 mm length at 10 phr loading and 6 mm length even at a loading of 5 phr start to exhibit severe fibrillation: the longitudinal splitting of fiber having larger diameter into thinner fibrils during processing. Fibrillation favorably affects the mechanical bonding with the matrix because of the large surface area as well as surface irregularities provided by the fibrillated fiber. However, fibrillation adversely affects the fiber dispersion by enhancing the fiber aggregation. This leads to a greater disturbance in the strain hardening behavior of the TPU matrix and subsequently reducing the tensile strength and elongation at break especially at high fiber loading. Therefore, to control the degree of fibrillation a pre-treatment has been applied on the aramid fiber surface with maleic anhydride-grafted-polybutadiene (PB-g-MA) prior to mixing it with the TPU matrix. A good quality of fiber dispersion with improved tensile strength and elongation at break has been achieved even with 6 mm short fiber at a loading of 10 phr with the treatment of only 5 phr of PB-g-MA. The tensile fractured surface morphological analyses of PB-g-MA coated fiber filled TPU composite strongly advocate these results. (c) 2013 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 130: 2205-2216, 2013