The use of natural fibers as raw materials for insulation fiberboard production is emerging as a strategy to replace wood fibers. This study developed an ultralightweight natural fiber insulation core fiberboard (CFB) with high mechanical strength, hygroscopic resistance, and excellent acoustic and thermal insulation properties. This study examined the production of CFB, which utilizes Mexican feather grass fibers with an epoxy resin binder across a range of densities of 0.18–0.36 g∙cm−3. Furthermore, the impact of incorporating a reinforcing skin layer of woven glass fibers on the core fiberboard's physical, mechanical, acoustic, and thermal properties was evaluated. All the fiberboard samples exhibited excellent thermal conductivity values (0.048–0.057 W/mK), which increased with increasing panel density (0.18–0.36 g∙cm−3). In addition, all of them displayed superior mechanical properties following the ASTM C208 standard. In terms of climatic resistance of the fiberboards, the results displayed excellent water resistance, exhibiting minimal humidity content (<5 %), thickness swelling (<6.5 %), and a hydrophobic surface, as indicated by the high-water contact angle (>121.96 at 30 s). Sound reduction exhibited a frequency-dependent tendency, with denser and sandwich fiberboards showing greater sound reduction of up to 27.9–36.56 dB at 3150 Hz for CFB-0.36 and SFB-0.52, respectively. Following ASTM C208, both core fiberboards and those coated with woven glass fiber skins (sandwich fiberboards, SFB) met the thermomechanical property requirements for regular and structural wall sheathing applications, respectively. These findings highlight the potential of Mexican feather grass as a bio-based alternative to wood, enabling the production of eco-friendly ultralightweight fiberboards with excellent thermomechanical properties suitable for building construction, such as regular and structural wall sheathing applications and ceiling decorations.