A novel elastomer-modified multicomponent, multiphase waste-sourced biocomposites, was prepared for converting waste biomass and plastic into value-added products. The effects of blending elastomer–olefin block copolymer (OBC) and maleic anhydride (MAH), and divinylbenzene (DVB) co-grafting of recycled polypropylene (rPP) matrix on the adhesion interface, structure, and properties of high wood flour-filled (60 wt.%) composites were thoroughly investigated. The results indicated that DVB introduced branched structures into the polymer matrix molecular chain and increased the MAH grafting rate. Co-grafting rPP/OBC blends enhanced the interfacial adhesion among rPP, OBC, and wood flour. Additionally, MAH-grafted OBC was prone to encapsulating rigid wood flour, thereby forming an embedded structure. Notably, the tensile modulus and impact strength of the final three-component composites increased by 60% and 125%, respectively, compared with the unmodified composites. Additionally, dynamic mechanical analysis revealed that DVB-induced branching promoted the formation of microvoids in the OBC shell layer surrounding the wood, which in turn induced significant plastic deformation in the polymer matrix. This work offers a facile and efficient method for preparing high-toughness, high-stiffness, and low-cost waste PP-based composites for automotive interiors, and indoor and outdoor decoration.