Natural fiber-reinforced composites can contribute to reducing carbon footprint goals due to their ability to reduce overall product weight, bio-diverse feedstocks, and recyclability potential. In this work, natural fiber-based composites containing the reinforcement of coconut husk and bagasse fiber with calcium carbonate (CaCO3) ingredients were prepared and analyzed. The composites were analyzed for mechanical, thermomechanical, and morphological properties. The reinforcements were chemically functionalized using 5% w/v NaOH to enhance their interactions with the epoxy resins. The chemical functionalization created perforation on the fiber surface, improving the interlocking of fibres with the resin material and strengthening the mechanical performance of the composite. The composites developed using modified reinforcement treatment resulted in increased tensile strength (64.8%) and flexural strength (70%). The reinforcement treatment influenced the hydrophilicity, and the water absorption of treated composites was reduced more than five times compared to the unmodified composites. Scanning electron microscopy revealed morphological changes due to fiber modification, the underlaying mechanism of fiber contraction, and enhanced fiber matrix interface interlocking and adhesion strengthening. Thermal analysis confirmed that alkali treatment improves the crystallinity of the fiber and thereto the degradation temperature of treated fiber composites (both bagasse and coconut husk), which is 375.27 °C, the highest amongst the developed hybrid composites.