The large quantity of moisture in wood-flour may lead to the deterioration of the cell structure of-foamed plastic wood-flour composites in terms of cell size, non-uniformity, and poor surface quality. Since these anomalies can cause poor mechanical properties of the foamed composites, the removal of the moisture from wood-flour becomes a critical issue with respect to the improvement of these properties. The wood-flour in this experimental study was first oven-dried at different temperatures and then subjected to acetone extraction and thermogravimetric analysis (TGA). The oven-dried wood-flour was blended with plastic and then subjected to extrusion foaming. The results obtained from the TGA studies indicate that most volatiles were released from the extractives. Conversely, a comparative expenmental study of the foaming behavior of these plastic/wood-flour composites versus that of undried wood-flour composites confirms that removal of the adsorbed moisture from wood-flour results in a better cell morphology. However, it seems that some gaseous emissions released from wood-flour are soluble in plastic and thereby favorably contribute to the development of the cell morphology. This paper describes the expansion mechanisms of wood-flour composite foams resulting from the adsorbed moisture and dissolved gaseous emissions as well as resulting from the finely dispersed undissolved gas bubbles released from a chemical blowing agent.