Natural fibers-reinforced cement composites have recently attracted more interest due to the trend in the development of sustainable construction materials. However, the poor fiber–matrix interface compatibility, which is caused by the swelling-shrinking behavior of hydrophilic natural fiber, negatively affects the mechanical properties of the composites thereby hindering their practical application. In order to promote interfacial compatibility, a new fiber surface treatment is needed. A low-cost alkyl ketene dimer (AKD) is adopted in this work, aiming at replacing the relatively expensive silane agents. This study focuses on fiber surface treatment and the resulting effects on the interface compatibility and mechanical performances of the composites. The effect of the fiber modification was characterized by FTIR and water absorption test; The interfacial compatibility of the composites was evaluated by the compatibility index calculation and SEM observation; A series of strength properties of the composites were carried out considering the influence of interface compatibility on mechanical performance. Results show a clear improvement in both interface compatibility and mechanical properties of the composites when AKD-modified fibers are used as reinforcement. The compressive and flexural strength are effectively increased up to 53 MPa and 8 MPa, respectively. Moreover, the approach of the low-cost AKD modification could further be applied to any natural fibers in cementitious composites, allowing cost-effectiveness in practical applications.