Abstract The effect of degraded low-density polyethylene (dLDPE) as compatibilizer on the morphology and properties of low-density polyethylene (LDPE)/wood flour (WF) composites was investigated. The formation of functional groups on the degraded polyethylene chains enables the dLDPE to be used as a compatibilizer. The SEM images show smooth surfaces with fewer voids and fibre pullout for the dLDPE modified composites. The carbonyl index of the dLDPEs increased up to 7 weeks degradation, while the molecular weight decreased significantly. In the dLDPE treated composites a nucleating effect of the fibres gave rise to increased LDPE melting and crystallization enthalpies. There was no significant improvement in the thermal stability of the dLDPE treated composites. The presence of dLDPE observably influenced the viscoelastic properties and mechanical properties of the composites. It was found that the higher carbonyl index dLDPEs are more efficient compatibilizers in LDPE/WF composites, despite their significantly reduced molecular weights.