Wood fiber reinforced polylactide is a biodegradable composite where both fibers and matrix are from renewable resources. In the development of such new materials, information on mechanical behavior on the macroscopic and the molecular level is useful. In this study, dynamic Fourier transform infrared (FT-IR) spectroscopy is used to measure losses at the molecular level during cyclic tensile loading for bonds that are characteristic of the cellulosic fibers and the polylactid matrix. This molecular behavior is compared with measured macroscopic hysteresis losses for different moisture levels. The results show that moisture ingress will transfer the load from the fibers to the matrix, and that a more efficient fiber-matrix interface would diminish mechanical losses. Although the dynamic FT-IR spectroscopy method is still qualitative, this investigation shows that it can provide information on the stress transfer of the constituents in wood fiber reinforced plastics.