A novel compatibilizer tannic grafted poly(12‐hydroxy stearate) (TA‐g‐PHS) was synthesized using tannic and 12‐hydroxystearic acid as raw materials through the esterification reaction. The compatibilizer was used to improve the compatibility between polypropylene (PP) and microcrystalline cellulose fibers (MCF). The impact strength and tensile strength of MCF/PP composites modified with the TA‐g‐PHS were 38.51 kJ/m2 and 30.45 MPa when the content loading of TA‐g‐PHS is 3 wt% and MCF is 10 wt%, which were improved by 40.5% and 76.9%, respectively, compared to the MCF/PP composites alone. The melt flow rate improved with the addition of TA‐g‐PHS. And the thermal properties have slightly improved. Moreover, the SEM images of the fracture surfaces display that MCF is relatively well dispersed in the PP matrix by adding TA‐g‐PHS. It can be inferred that the PP and MCF matrix interfacial bonding was strengthened. POLYM. COMPOS., 39:2036–2045, 2018. © 2016 Society of Plastics Engineers