Alfa fibers (Stipa Tenacissima) were effectively utilized in this study as a promising cellulose source for isolation of carboxy-functionalized cellulose nanofibrils (CNFs) using multiple treatments. Pure cellulose microfibers (CMFs) were firstly extracted by alkali and bleaching treatments. CNFs with an average nanofibrils diameter ranging from 1.4 to 4.6 nm and a crystallinity of 89% were isolated from CMFs by a combination of TEMPO-oxidation and mechanical disintegration processes. The morphology and physico-chemical properties of cellulosic materials were evaluated at different stages of treatments using several characterization techniques. Various CNF loadings (5–15 wt%) were incorporated into PVA polymer to evaluate the nanoreinforcement ability of CNFs and to produce CNF-filled PVA nanocomposite materials. The tensile and optical transmittance properties, as well as the morphological and thermal properties of the as-produced CNF-filled PVA nanocomposite films were investigated. It was found that the tensile modulus and strength of nanocomposites were gradually increased with increasing of CNF loadings, with a maximum increase of 90% and 74% was observed for a PVA nanocomposite containing 15 wt% CNFs, respectively. The optical transmittance was reduced from 91% (at 650 nm) for neat PVA polymer to 88%, 82% and 76% for PVA nanocomposites containing 5, 10 and 15 wt% CNFs, respectively. It was also found that the glass transition temperature was gradually increased from 76 °C for neat PVA to 89 °C for PVA nanocomposite containing 15 wt%. This study demonstrates the importance of Alfa fibers as annual renewable lignocellulosic material to produce CNFs with good morphology and excellent properties. These newly developed carboxy-functionalized CNFs could be considered as a potential nanofiller candidate for the preparation of nanocomposite materials of high transparency and good mechanical properties.