In the present work dough moulding compound premixes of allyl glycidyl ether modified (AGE)-potato starch, (DS)=0.2, has been prepared and tested for its fiber reinforced composite properties. The AGE-starch was hydrolyzed with α-amylase under neutral condition for 6h at 45°C for improved process ability. The grafting and hydrolytic scission was confirmed by nuclear magnetic resonance (NMR) and size exclusion chromatography (SEC), respectively. Homogeneous composite premixes of AGE-starch, wood fibers, various amount of glycerol and ethylene glycol dimethacrylate were successfully mixed with a Brabender-kneader at 55°C and cured by compression molding at 150°C using 2wt% of dibenzoyl peroxide. Adding 5wt% of glycerol did not reduce the ultimate strength of the composites; 10% glycerol reduced the strength from 60MPa to 40MPa, and 16% glycerol to 14MPa. The results with 5wt% glycerol are comparable with earlier achieved results. The water absorption rate increased with increased glycerol content and the mechanical strength of the composites was lost completely when the moisture uptake reached 15wt%.