Maleic anhydride reacts with polyethylene(PE-g-MAH)and FTIR spectra proves maleic anhydride is grafted to polyethylene. Aluminium trihydroxide(ATH) treated with the PE-g-MAH is melt and blended with polyethylene. The rheological property, mechanical properties, fire retardance and morphology of PE/ATH composites are investigated. The data indicates that the rheological and the mechanical properties are improved while ATH is treated with PE-g-MAH of the right dosage. However, the LOI is hardly changed.It is found that better dispersion is achieved when ATH is treated with PE-g-MAH under SEM.