A wood-fiber reinforced thermoplastic composite (WFRP) is a combination of wood fibers and a polymer obtained by melt processing, which takes advantage of the beneficial characteristics of wood and plastic. Wood fiber is well known as a low-cost, strong, abundant and low-density filler in thermoset polymer compositions. These wood fibers also improve the impact strength of resins. Wood-fiber reinforced plastics (WFRP) have received increasing attention recently as potential structural materials. The use of wood-fiber in thermoplastic polymer composites has been widely investigated, but unlike thermoset polymer compositions, wood fibres generally reduce the toughness of most thermoplastic composites. Microcellular plastics are usually defined as foamed plastics where the cell size is less than 30 μim, comparatively much smaller than that obtained in conventional foams. One method of improving polymer toughness is to create a cellular structure. The motivation behind this research was to enhance the toughness and overall mechanical properties of WFRP by inducing a microcellular structure. In this paper, the impact strengths of notched cellular polystyrene composites (PSC) are discussed as a function of fiber content, and foaming conditions. The statistical analysis of data showed that fiber content had the greatest effect on impact strength. The relationship between processing, structure, and impact properties was discussed based on theory of energy absorption in cellular materials.