The effects of particle sizes/distribution and contents on the processing, changes in microstructure and functional properties of wood polymer composites (WPCs) prepared from virgin high-density polyethylene (vHDPE) and sodium hydroxide (NaOH) treated Daniella oliveri wood flour via compression molding have been explored. Findings from this study suggested that an appropriate choice of wood flour characteristics could improve the interactions between the wood flour and the vHDPE matrix by eliminating incomplete wetting, segregation, and agglomeration of wood flour particles during processing while enhancing mechanical and thermal properties of the composites. Properties of the WPCs were optimized when wood flour of particle sizes/distribution and contents of +210–300 µm and 35 wt%, respectively, were blended with vHDPE matrix.