Wood chips were used in their original form without any physical or chemical treatment as reinforcement for polypropylene to develop composites as potential replacement for medium density fiber (MDF) boards, gypsum based false ceiling and other building materials. Wood chips are generated as byproducts and have limited and low value applications. Composites with up to 90% wood chips were developed through compression molding and the mechanical, acoustic and thermal properties were studied. Further, maleated polypropylene (MAPP) was used (1–5% w/w based on woodchips used) as compatibilizer and changes in properties were recorded. Up to 300% increase in tensile properties were observed when 5% compatibilizer was present. Tensile properties of the composites containing MAPP were higher than that of commercially available medium density plywood boards and also gypsum based ceiling tiles. Addition of MAPP did not change thermal conductivity but decreased sound absorption. Wood chips reinforced PP composites containing MAPP show exceedingly high properties and could replace particle, fiber boards and other building materials in current use. Utilizing the wood waste also results in environmentally friendly, sustainable and low cost building materials. Graphical Abstract: [Figure not available: see fulltext.]