Poly(vinyl alcohol) (PVA) is a synthetic, bioinert, semicrystalline, biodegradable, non-toxic and thermoplastic polymer extensively used in the field of biomedical engineering. The weak mechanical properties of PVA, such as low strength and Young’s modulus, limit its application as a bone implant. However, PVA can be reinforced with a suitable material to improve its mechanical properties. Carbon fiber (CF)–polyetheretherketone (PEEK) is a superior thermoplastic synthetic biomaterial with good tensile strength, stiffness, wear properties and X-ray translucence. In this study, CF–PEEK-reinforced PVA composites were prepared by varying the CF–PEEK concentration (0, 0.25, 0.50, 0.75, 1.00, 2.00 and 3.00% w/v) in the PVA matrix (10% w/v) using the solvent-casting method. The physical, chemical, biological and mechanical properties of the prepared PVA–CF–PEEK composites were studied. The environmental scanning electron microscopy micrographs showed agglomeration of CF–PEEK at higher concentrations – that is, 1, 2 and 3% w/v. With the inclusion of CF–PEEK in PVA, the contact angle of the composites was found to increase. The increased hydrophobicity of the samples resulted in reduced swelling and degradation rate. In the hemolysis study, the percentage hemolysis values were found to be <5%, revealing the hemocompatible nature of the developed composites. An increase in in vitro protein adsorption was observed, and cell viability studies showcased the biocompatible nature of the prepared composite samples. Thus, the developed CF–PEEK–PVA polymer composites present great potential for bone graft applications.