In the present work, polyester composites reinforced with a newly identified Cyperus pangorei fiber (CPF) were developed by compression moulding technique. The effects of varying fiber content and fiber length on the mechanical properties of the Cyperus pangorei fiber reinforced polyester composites (CPFCs) such as tensile, flexural, and impact properties were studied. Mechanical strength of the CPFCs increased with fiber length up to 40 mm beyond which a reverse trend was observed. Based on the test results, it was concluded that the critical fiber length and the optimum fiber weight percentage were 40 mm and 40 wt% respectively. The maximum increase of 164% and 117% were found for the tensile and flexural strength of the composite with 40 mm fiber length and 40 wt% fiber content, respectively. On the other hand, a 64% increase in impact strength was noticed for the optimum case. The increasing contact surface between the fiber and the polyester matrix in optimum condition can restrict the probability of fiber pullout and in turn can make the composite carry more load. The chemical structure of CPF was also analyzed using Fourier-Transform Infrared Spectroscopy (FTIR) spectrum. The morphological analysis of fractured samples was performed using Scanning Electron Microscopy (SEM) to understand the interfacial bonding between CPFs and polyester matrix. The optimal composite can be a suitable alternative in the field of structural applications in construction and automobile industries.