The building and construction sector consumes large volume of materials, it generates enormous amounts of solid wastes, and it is responsible for about 40% of annual global CO2 emissions. So, sustainable biodegradable, recyclable or renewable materials such as polymer-based materials are seen as potential substitutes to their non-renewable, non-environmentally friendly counterparts. Poly (lactic acid) (PLA) is a polymer produced from renewable sources, thereby supporting sustainability. The use of PLA is sometimes limited by its inherent brittleness, and insufficient mechanical strength when used alone. The brittleness of PLA may be reduced by toughening it with rubbery additives, while its strength can be improved through reinforcement with materials such as natural fibres. In this thesis, fibres extracted from harakeke (Phormium tenax), otherwise called New Zealand flax is used as reinforcement in PLA composites. The fibre properties were modified to facilitate processability, improve its compatibility with PLA, and to enhance its reinforcing ability by removing components such as lignin and hemicellulose which are detrimental to the mechanical and thermal performance of the composite. Different methods such as chemical treatment with alkali solutions, mechanical processing, and enzymatic treatment were explored to modify the harakeke fibre. In addition, polybutylene succinate (PBS) was blended with PLA, followed by reactive compatibilization of the reinforced PLA/PBS blend with dicumyl peroxide (DCP), with the aim of improving the toughness of the composite. The results show that harakeke fibre is a good reinforcement for PLA, as it increased the composite strength from 62±1.02 MPa to 82±0.98 MPa. In addition, it was found that PLA/PBS blends can be reactively compatibilized and reinforced concurrently, thereby supporting the production of composites with improved mechanical, thermal, and thermomechanical performance. Generally, the results show that enzymatic treatment could serve as a more sustainable environmentally friendly route to fibre treatment as it obviates a chemical processing route and supports recyclability and reusability. Likewise, the combination of mechanical processing with enzymatic treatment has great potential for producing large scale environmentally friendly and good quality fibres, suitable for composites.