Natural fibers are widely used as reinforcement in composites. Pine needles are one of the major biowaste generated by Pinus roxburgii plant. This species is found abundantly in the forests of Himachal Pradesh. In this work, composites of urearesorcinolformaldehyde resin-reinforced with Pine needles fibers were prepared. Fibers were chemically modified to improve their compatibility with matrix. These fibers were mercerized with NaOH solution and acetylated to increase their hydrophobic character. The chemically modified fibers were characterized with Fourier transform infrared spectra, 13C-nuclear magnetic resonance (NMR) spectroscopy, and scanning electron microscopy. The composites were prepared with treated and untreated fibers containing 30% fibers by weight using compression molding technique. The morphology of the materials thus obtained was evaluated by scanning electron microscopy. The chemical modifications of fibers improve fibermatrix adhesion and also have markedly effect on mechanical properties of composites. Moreover, the thermal resistance of these composites was improved on chemical modification. These results indicate that chemically modified fibers exhibit better compatibility with the polymer matrix than that of untreated fiber. (C) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci, 2012