Binary composites of high-crystalline fibrous cellulose with polypropylene (PP) or maleic anhydride-grafted polypropylene (MAPP) were prepared by melt-mixing with different contents of cellulose from 0 to 60 wt%. Ternary composites of cellulose with PP and MAPP were also prepared to investigate the effects of MAPP as a compatibilizer between cellulose and PP. Scanning electron microscopy revealed that the addition of MAPP generates strong interactions between a PP matrix and cellulose fibers: All cellulose fibers are encapsulated by layers of the matrix and connected tightly within the matrix. Thus, the tensile strength and Young's modulus of MAPP-containing composites increase with an increase in MAPP and cellulose content, in contrast to the decrease in tensile strength of a PP-based binary composite with an increase in cellulose. Cellulose fibers act as a nucleating agent for the crystallization of PP, which is promoted by the addition of MAPP through an increase of the crystallization temperature of PP in the composite. Accordingly, both cellulose and MAPP facilitate the thermooxidative stability of PP composites in the following order: MAPP/cellulose > PP/MAPP/cellulose > PP/cellulose > PP. Relative water absorption increases with an increase in cellulose content, decreasing with the addition of MAPP. MAPP-containing cellulose composites have high potential for applications as environmentally friendly materials.