In the current study, sisal fiber-reinforced hybrid composites have been developed by integrating a bidirectional mat with a blend of epoxy using Fe-doped ZnO (IDZO) nanoparticles at concentrations of 0.2, 0.4, 0.6, and 0.8 wt%. Hand-lay-up approach was used to create the composites. The composites were characterized through a comprehensive analysis of their density, water absorption, elasticity, thermogravimetric analysis, mechanical resistance, thermal conductivity, microhardness, and propagation of sound properties, including sound absorption coefficients and sound transmission class ratings. As filler loading increased, the bio-composite sample’s hardness increased under the density and void volume fraction values, with 0.8 wt% composite sample showing the superior micro-hardness. A positive correlation was observed between the ZnO nanoparticle weight percentage and thermal conductivity, with improve nanoparticle content leading to improved thermal performance. Composites containing 0.4 wt percent nanoparticles showed superior tensile strength (66.8–84.16 MPa), flexural strength (97.69–120.02 MPa) and flexural modulus (3.56–7.68 GPa). It has been observed that the weight percentage of IDZO filler greatly influences the sound absorption efficiency of the current composites. These findings highlight the promising potential of these novel biocomposites in advanced engineering applications, emphasizing their usefulness in demanding environments with biodegradability and high-performance thermal, mechanical, and acoustic properties. Based on the sound transmission class ratings, the sisal fiber biocomposites have been regarded as great adoptions for use as sound-absorbing materials such as wall partitions, doors, enclosures, and structural components, thermal insulation systems, and electrical insulation.