This work evaluates the effect of plasma treatment on the wettability, dynamic mechanical and thermal properties of compression-molded composite panels produced from wood fiber (WF) and polypropylene (PP). Initially, WF was treated with different plasma durations (60, 120, and 180 s radiation). Afterward, the contact angle, moisture uptake, storage modulus, loss modulus, damping loss, and weight loss of the specimens prepared from untreated and plasma-treated were evaluated. Results revealed that the plasma treatment facilitates the interactions between WF and PP, and increases the adhesion properties. Compared with the lowest contact angle of 74.8° for the untreated specimens, the highest contact angle was found in the treated specimens around 79.06°, 81.29°, and 82.7°, using 60 and 15 using 180 s plasma radiations. Furthermore, the water absorption of the specimens reduced as a result of plasma treatment. The plasma-treated specimens demonstrated better molecular restriction and larger dynamic modulus than the unmodified ones. The tan δ peak signifying the glass transition temperature of composites shifted to a higher temperature, in the presence of plasma treatment. It was noted that the thermal stability of the composite panels produced from plasma-treated wood was remarkably improved.