Bagasse fibers were modified using NaOH, KH550, and NaOH/KH550, respectively, and used as reinforcement to prepare bagasse/starch/PVA composite. A combination of Fourier-transform infrared (FTIR) spectroscopy and X-ray diffraction (XRD) was used to investigate the chemical composition. The surface of bagasse fibers and cross-sectional morphologies for bagasse/starch/PVA composite were also characterized by scanning electron microscopy (SEM). Contact angles were measured to test the wettability of the resulting composite. After the chemical treatment with NaOH/KH550, the mechanical properties of the composite can be greatly improved. The contact angle is larger, indicating the variation of surface property from hydrophilicity into hydrophobicity.