Poly[lignin-g-(1-phenylethylene)] graft copolymers synthesized by free-radical, graft copolymerization on lignin and verified by fractionation, infrared spectroscopy, and solubility change possess macromolecular surface activity as indicated by their capacity to form stable emulsions between incompatible fluid phases, to adhesively bond to wood surfaces, and to change the contact angle of water on coated wood. The surface activity of the copolymer changes with its composition. As the weight percent lignin in the copolymerization reaction product increases beyond 20 wt %, the amount of the emulsion phase formed in a water-benzene mixture decreases. Maple wood flour could be solvent-coated with a copolymer and both coated and uncoated maple flour could be extruded through a stranding plate into a wood-filled composite with polystyrene. Physical property tests show that composite control samples are about 3% stiffer and less deformable than are the copolymer composites when dry and about 5 or more percent more deformable than are the copolymer composites when wet, showing that the copolymer coating increased the wet strength. The copolymer samples are always denser than are the controls. Copolymer coating on wood filler decreases the swelling in the composite, the partial molar volume of the imbibed water, and the dimensional change in the solid. These effects cause increase in the density of the copolymer composite upon imbibition of water. Coating the wood component of the composite with a copolymer creates a hydrophobic barrier that produces a decrease in water imbibition into the composite, which will not disappear in 20 or more years of water immersion. Expansion in water is highly dependent on the direction of extrusion. The length expands about 1%, the width expands about five times as much, and the thickness expands over 10 times as much as does the length. This differential expansion may be due to the 22% reduction in the width and a 71% reduction in the thickness of the melt as it passes through the die and the alignment of the long axis of the fiber with the direction of flow through the die. The reaction product is a thermoplastic solid stable below 200degreesC and thermoformable at between 150 and 180degreesC. Products which contain between 10 and 50 wt % lignin are heterogeneous solids. (C) 2003 Wiley Periodicals, Inc.