Expanded polystyrene (EPS) has been widely used as a disposable packaging material in many industries thanks to properties like low density, lightweight, high impact, and vibration damping. Although usage of EPS increases annually, recycling facilities often refused to process postconsumed EPS due to the poor economic viability associated with high logistics and transportation cost in collection, storage, and shipment of the material. The objective of this research is to enhance the value chain of postconsumed EPS by investigating its potential as feedstock in the development of sustainable wood plastic composites (WPC), thereby providing an attractive business opportunity that also increases interest in EPS recycling and indirectly continue the lifespan of disposed EPS. Varying compositions of recycled polystyrene (rPS), coconut shell (CS), maleated polystyrene (MAPS) and Ultra-Plast WP516 were compounded using a HAAKE internal mixer and compression molded to form WPC. The effects of material formulation on mechanical, thermal, and morphological properties of the composites were studied. The experiment showed that WPC formulated with 100 phr of rPS, 30 phr of CS, 3 phr of MAPS, and 1 phr of Ultra-Plast WP516 possesses higher modulus and tensile strength compared to the neat EPS, measured at 2.5 GPa and 27.5 MPa, respectively. Although the WPC experienced initiation of thermal degradation at a temperature lower than neat rPS, but the thermal stability of rPS/CS composites containing varying composition of MAPS and Ultra-Plast WP516 was better at high temperature. Furthermore, a 50% weight loss took place at a higher temperature. Nevertheless, the glass transition temperature of the rPS/CS composite with addition of MAPS and Ultra-Plast WP516 was found lower than the neat rPS. POLYM. ENG. SCI., 60:202-210, 2020. (c) 2019 Society of Plastics Engineers