This work involved a study of polymer-fiber composites as biodegradable packaging made from recycled polyethylene (r-PE) and chemical-treated cotton fabric waste micro fibers. A compatibilizer, polyethylene-graft-maleic anhydride (PE-g-MA), was used to improve properties of the composites. Factors affecting composite properties were investigated including % PE-g-MA loading, and % fiber loading. The fiber composites were prepared by melt-blending technique. The materials were first mixed by a twin-screw extruder and shaped into samples by an extrusion blow molding machine. The samples were then characterized for mechanical, and morphological properties. It was found that properties of the composites were improved by adding the compatibilizer. Optimum properties of the composites were found at 10% (wt%) PE-g-MA loading. It was also revealed that tensile strength and modulus was found to increase as the % fiber loading was increased. SEM micrographs confirmed that interfacial bonding between the cellulose fibers and the r-PE matrix was enhanced as fewer voids at the interfaces were revealed by adding the PE-g-MA compatibilizer to the composites. Film formation occurred on all composites even if the polymer itself was inert biodegradation. The microbial colonization affected mainly of surface properties r-PE composites while changes were monitored also in the bulk properties of cellulose microfiber.