A process for making a polyvinyl chloride and wood composite pellet by extrusion. The polyvinyl chloride and wood fiber are introduced into the extruder at a ratio of approximately 6:4 by weight, respectively. The polyvinyl chloride is melted and blended with the wood fiber so that the interstitial voids of the wood fiber are filled with polyvinyl chloride. After being extruded through a die, the molten material is cut into pellets having a bulk density of preferably between 0.7 to 0.8 gm/mm 3 .