In the present work, a terpolymer of acrylamide-formaldehyde-urea (AMFU) which could interact with both plant fiber and high density polyethylene (HDPE) was synthesized, and which as novel compatibilizer for HDPE/plant fiber was also investigated. The result of SEM demonstrated that interfacial adhesion was observed in the presence of AMFU compatibilizer but void at the interface of HDPE/plant fiber without compatibilizer. Evident improvements on both static and dynamic mechanical property of WPC in the presence of AMFU compatibilizer were observed. Water uptake indicated that WPC with AMFU compatibilizer shown a lower water uptake. This research gives a new way in the design of new compatibilizer for WPC in the future.