Wood from beetle-killed trees was used to fabricate wood-plastic composites. Beetle-killed lodgepole pine trees were harvested, chipped, and defibrated. Sawdust collected during chipping and fibers were modified with potassium methyl siliconate (PMS) and injection-molded with high-density polyethylene into composites. Treatment of the fiber/sawdust with PMS decreased water sorption and increased dimensional stability. Increasing fiber-to-sawdust ratios also decreased water sorption. The performance of composites containing wood from beetle-killed trees was similar to the performance of composites containing wood derived from a healthy resource.