In this study, the effects of oxidized polypropylene, as a compatibilizer, and Nano-clay particles in improving the thermal properties of wood plastic composites are investigated. For this purpose, polypropylene polymer was oxidized in the vicinity of the air oxygen for 2 hours. Then, in order to produce the samples, Nano-clay particles at three levels (0%, 2% and 4%) were mixed with wood fibers, polypropylene polymer and the compatibilizer. Finally, the samples with thickness of 2 mm and dimensions of 15x15cm were made by using hot press. For more precise investigation, the morphology of wood plastic composites was studied by using X-rays diffraction and electronic microscope images. Thermal properties of the composites were evaluated through thermal and differential analyses. The results of the thermal tests demonstrated that the addition of oxidized polypropylene and Nano-clay particles significantly improve the thermal properties of wood plastic composites. Furthermore, increment of Nano-clay particles content additionally improves thermal stability of the composites and also reduces the released heat amount during the thermal degradation. In addition, TEM images showed that the dispersion of Nano-clay particles in the composite has an intercalation structure. This subject also verified by the X-rays diffraction and it is an evidence of better thermal stability of the achieved wood plastic composites.