As a sustainable and inexpensive agricultural byproduct, wheat straw has gained major interest as filler in green composites in recent years, but previous studies about PLA/wheat straw composites have reported modest enhancement or even major reduction in physical performance. Here, we report a new method for both production cellulose nanofibrils and achieving excellent dispersion in composites free of solvent for the first time, and enhanced physical performance is obtained via solid state shear milling process (SSSM). The SSSM pretreatment process led wheat straw an ultrafine particle size and even the separation of cellulose nanofibrils from micro-sized pristine cellulose fibers. Both optical and electron microscopy revealed that composites made by SSSM process exhibit excellent dispersion of hemicellulose, lignin and cellulose nanofibrils which derived from wheat straw. Such PLA/wheat straw composites exhibited fast crystallization rate with 0.8 min crystallization half-time and 41.4% crystallinity, leading major enhancement in flexural modulus which exceed the known value reported in the literature. In addition, a heat deflection temperature of 73 °C is observed with 30%wt wheat straw, which is much higher than neat PLA. Furthermore, high water vapor permeability is observed in composites, enabling food packaging applications especially for respiring fresh products such as fruits and vegetable. The approach presented in this paper highlights a novel technique for recovering wheat straw in producing value-added products.