The use of thermoplastic composites reinforced with natural fibers is a mature technology now with a considerable growth rate. The properties of all polymer/wood composites are determined by four factors: component properties, composition, structure, and interfacial interactions. Matrix stiffness determines the extent of reinforcement, while aspect ratio and particle size are the most important characteristics of the wood. Wood content is usually very large in order to achieve maximum effect and lowest possible price. At large fiber content, wood particles can touch each other purely from geometrical reasons resulting in a kind of aggregation which decreases composite strength. Alignment of the fibers, that is, orientation is the other structural factor that influences composite properties considerably. Interfacial interactions are inherently weak in most commodity thermoplastic/wood composites. External load initiates various micromechanical deformation processes in these materials: shear yielding of the matrix, debonding, fiber pullout, or fiber fraction may occur simultaneously or consecutively. Because of easy debonding, interactions must be modified usually by coupling in most composites. In the case of strong interfacial adhesion, the inherent strength of the wood particles may limit the maximum strength of the composites. A brief summary of processing technologies and main application areas are also presented at the end of the article.