In this investigation it was demonstrated that composites made from commingled polyethylene terephthalate (PET), high-density polyethylene (HDPE), and newspaper fiber showed incompatibility among all components. Statistical analysis revealed a significant contribution of HDPE and fiber to energy consumption; HDPE, PET and fiber had disparate influences on tensile strength. HDPE was significantly low at the 99% confidence level, and fiber was significantly higher at the 5% confidence level. The three individual components had significant effects on Young's modulus at the 99% confidence level. However, the interaction of the three components had no significant effect on tensile strength or modulus. Scanning electron microscopic (SEM) analysis revealed the appropriate dispersion of PET or fiber in the HDPE matrix and poor interfacial adhesion. Methods of improving the interfacial interaction are discussed.