In the present work, the natural composites based on sugarcane bagasse fiber and/or coconut shell powder were processed using hand lay-up technique. The matrix selected was polyester. Three different types of composites were considered: polyester matrix + sugarcane fiber, polyester matrix + sugarcane fiber + metal mesh and polyester matrix + sugarcane fiber + coconut shell filler. The sugarcane fibers were used in three forms: (1) chemically treated by NaOH, (2) chemically treated by HCl, and (3) untreated condition. In total, 9 types of composites were developed and studied for tensile, flexural and impact properties. The fracture surface of the tensile and flexural test samples was examined with the aid of scanning electron microscope to understand the bonding characteristics and the mode of failure. The key-findings from the present work are: (1) the composites reinforced with the NaOH treated sugarcane fiber and the metal mesh show superior tensile and impact properties whereas the composites reinforced with the NaOH treated sugarcane fiber show the best flexural properties, (2) NaOH treatment of sugarcane fibres has a significant effect in improving the mechanical properties by surface modification of fibres through OH− functional groups. In contrast, HCl treatment of sugarcane deteriorates the surface of the sugarcane by absorbing the electrons. The damaged surface results in weak bonding causing poor mechanical properties, (3) From the SEM analysis of the surface of the sugarcane fiber, it may be concluded that the surface condition of the sugarcane fibres decide the bonding with the matrix. The fiber pull-outs and porosities are less in the NaOH treated sugarcane reinforced composites. The fiber failure is the main mechanism of failure in the tensile test whereas the fiber debonding from the matrix is the main source of failure in the flexural test.