When wood-fibers are used in plastic composites; the inherent moisture present in the wood-fibers prevents the formation of a fine-celled structure in plastic/wood-fiber composite foams. The moisture present in wood-fibers is released during the heating and plasticating stage of extrusion, and it remains in the melt in a gaseous state until the extrudate comes out of the die. The moisture, if not removed, leads to the deterioration of cell structure, which in turn leads to poor mechanical properties of the foamed composites, so that moisture removal becomes critical. However, not all emissions on heating from wood-fibers are moisture, but some gaseous substances are also produced from the extractives and the degradation of biological building blocks of woods. Therefore, a careful control of extractive content in wood-fibers by controlling the drying temperature is essential in the production of fine-celled composite foams. Fine-celled HDPE/wood-fiber composite foams were successfully produced with wood-fibers oven-dried at 105°C.