Biocomposites were fabricated with biodegradable polymers and natural fibers. Biocomposites have benefits of low cost, low density, and biodegradability over inorganic fiber composite, and give comparable strength properties. Hydrophobic polymer used for sizing in paper industry, AKD (Akenyl Keten Dimer), was applied to natural fibers, red algae fibers (RAF) in this study, to make fiber surfaces more compatible to hydrophobic nature of matrix polymers. Composites with RAF, kenaf, glass fibers, and carbon fibers have been fabricated by a compression molding method and their thermo-mechanical properties have been studied. Also, the thermal dimensional stability test was done from at 30 to $100^{circ}C$. The storage moduli and the thermo-mechanical stabilities of polypropylene and poly lactic acid based biocomposites were improved by reinforcing with the RAF and much more with AKD treated fibers. Dimensional stability of biocomposite was also markedly improved by AKD pretrement on RAF.