Ramie fibers were incorporated into polypropylene as the reinforcement fillers. The transesterification between the hydroxyl groups of ramie fiber and the ester of maleic anhydride was employed to improve the compatibility of ramie fibers and the polypropylene matrix. The morphology of the composite surfaces and interfaces were studied using IR and SEM. The mechanical properties and water absorption of the composites were investigated. The results demonstrated that the esterification occurred on the surface of ramie fiber, due to which the compatibility between fiber and matrix treated was greatly improved. Because of the improved compatibility, the mechanical strength of the composites increased; while water absorption decreased.