Biocomposite materials are prepared by blending natural rubber (NR) and polylactic acid (PLA) reinforced with rubberwood sawdust (RWS). This study aimed to investigate the effects of PLA grade, NR/PLA blend ratio, and RWS content on flexure, tension, hardness, and water absorption characteristics, including thermal stability. The RWS content significantly affected the physical and mechanical properties of the biocomposite materials. The increasing additions of RWS from 30 to 50 wt% increased the mechanical modulus, hardness, and water absorption but decreased the thermal stability of the biocomposites. Polymer blended with an NR/PLA ratio of 30/70 reinforced with 30 wt% RWS exhibited the highest mechanical strength, whereas a blend ratio of 40/60 was found to be reinforced with 40 wt% RWS. The polymer matrix blended with a higher PLA content resulted in superior biocomposite properties. Thus, the biocomposites with an NR/PLA ratio of 30/70 had better properties than those with a ratio of 40/60. Further, biocomposites with PLA grade of low melt flow rate (6 g/10 min) improved their properties more than that of a high melt flow rate (80 g/10 min). Therefore, the appropriate formulation of biocomposites for producing children's toys is a blend ratio of 30/70 with 2003D PLA grade of low melt flow rate and reinforcement with 30 wt% RWS. The tensile, flexural, and compressive forces of a toy boat prototype were 70.08, 104.9, and 124.8 N, respectively, while the specified standard is 69.0, 69.0, and 113.5 N, respectively, thus meeting the requirements of the American Society for Testing and Materials F963.