A study of converting chemically modified wood into thermoplastic materials was undertaken to develop a new technology platform for the effective utilization of wood-based lignocellulosic materials. Highly substituted benzoylated spruce thermomechanical pulp (TMP) and lauroylated spruce TMP were used as components for thermoplastic composites of poly(styrene) and poly(propylene). Scanning electron microscopy (SEM), differential scanning calorimetry (DSC), thermogravimetric analysis (TGA) and dynamic mechanical thermal analysis (DMTA) were used to characterize the interfacial morphology and thermal properties of the resultant composite filaments. The coupling of the interfacial morphology effort and that of torque analysis applied during processing indicated that the thorough modification of wood fibers by benzoylation and/or lauroylation reactions can improve the compatibility between the wood-based lignocellulosic materials and poly(styrene) and poly(propylene). Thermal analysis showed that, with the addition of wood derivatives into poly(styrene) and poly(propylene) matrices, a slight decrease in their T(g)s was observed. Furthermore, all of the prepared composites showed improved thermal stability, as revealed by TGA. The resultant thermoplastic wood composites exhibited good melting properties and were readily extruded into filaments or sheets. (c) 2008 Wiley Periodicals, Inc. J Appl Polym Sci 111: 2468-2476, 2009