The compounding of wood flour filled polyethylene is discussed with reference to co-rotating twin-screw extruders from two manufacturers. An acrylic acid-grafted polyethylene (PE-HD-AA) copolymer was used as the compatibilizer in high density polyethylene wood flour (PE-HD/WF) composite system. Special consideration was given to the compounding of the heat- and shear sensitive wood flour The relevant screw configuration was found to consist of short mixing length with low intensity of shearing. A suitable combination of processing variables was necessary for limiting the thermal degradation of the wood filler however tensile properties of the composites were not affected much. Furthermore, the allowable range of processing temperature was limited, and there was an zipper bound of rotating speed and a lower bound of throughput rate within which the darkening of wood filler in the composites was acceptable. Vie processing window was also experimentally constructed in terms of the degree of darkening of wood composites.