Rubberwood flour and cellulose have been plasticized by cyanoethylation and then blended with low-density polyethylene (LDPE). A small quantity of epoxy functionalized polyethylene i.e., polyethylene-co-glycidyl methacrylate (PEGMA) has been added to further enhance the mechanical properties. The mechanical properties were measured according to the standard ASTM methods. SEM analysis was performed for both fractured and unfractured blend specimens. The mechanical properties were improved by the addition of PEGMA compatibilizer. LDPE blends with cyanoethylated wood flour (CYWF) showed higher tensile strength and modulus than cyanoethylated cellulose CYC-LDPE blends. However CYC-LDPE blends exhibited higher relative elongation at break values as compared with the former. The TGA analysis showed lowering of thermal stability as the filler content is increased and degradation temperature of LDPE is shifted slightly to lower temperature. DSC analysis showed loss of crystallinity for the LDPE phase as the filler content is increased for both types of blends. Dielectric properties of the blends were similar to LDPE, but were lowered on adding PEGMA. (c) 2006 Wiley Periodicals, Inc.