Maleic anhydride (MAH) was used as the grafting monomer, which was prepared by melt grafting reaction in the twin screw extruder with dicumyl peroxide (DCP) as the initiator, polylactic acid grafted with maleic anhydride (MAH-g-PLA) was successfully prepared as the interface compatibilizer. The PLA/Wood fiber/MAH-g-PLA composites were prepared by melt blending and injection molding with different proportions of compatibilizer added, within which PLA was for the matrix phase and wood fiber was for the reinforcing phase. The crystallinity, microstructure, thermal stability and dynamic thermomechanical property of the composites were studied by X-ray diffraction (XRD), scanning electron microscope (SEM), thermo gravimetric analyzer (TGA) and dynamic mechanical thermal analysis (DMA). Furthermore, the mechanical and water absorption properties of the composites were also characterized. Results showed that the tensile strength and flexural strength of the composites attained the highest at 30% MAH-g-PLA added, where the crystallinity of the composites also showed the highest value. DMA results showed that the addition of MAH-g-PLA interfacial compatibilizer increased the loss modulus of the composites and improved the toughness. Scanning electron microscopy (SEM) showed that when the MAH-g-PLA was used, wood fiber is well dispersed in the PLA matrix phase, and that the interfacial compatibility between the matrix and the enhanced phase was improved. Therefore, the addition of MAH-g-PLA could improve the interfacial compatibility of PLA/Wood fiber composites and improve the mechanical properties of the composites.