The use of wood fibers is a deeply investigated topic in current scientific research and one of their most common applications is as filler for thermoplastic polymers. The resulting material is a biocomposite, known as a Wood Polymer Composite (WPC). For increasing the sustainability and reducing the cost, it is convenient to increase the wood fiber content as much as possible, so that the polymeric fraction within the composite is thereby reduced. On the other hand, this is often thwarted by a sharp decrease in toughness and processability—a disadvantage that could be overcome by compounding the material with a toughening agent. This work deals with the mechanical properties in tension and impact of polypropylene filled with 50 wt.% wood flour, toughened with different amounts (0%, 10%, and 20%) of a polypropylene-based thermoplastic vulcanizate (TPV). Such properties are also investigated as a function of extrusion processing variables, such as the feeding mode (i.e., starve vs. flood feeding) and screw speed. It is found that the mechanical properties do depend on the processing conditions: the best properties are obtained either in starve feeding conditions, or in flood feeding conditions, but at a low screw speed. The toughening effect of TPV is significant when its content reaches 20 wt.%. For this percentage, the processing conditions are less relevant in governing the final properties of the composites in terms of the stiffness and strength.