The growth of poultry meat production is increasing industrial waste quantities every year. Feathers represent a huge part of the waste, and international directives and restrictions prevent landfilling of such biodegradable materials with high burning values. Furthermore, with their unique properties, poultry waste feathers are already a reliable resource for many byproducts, such as keratin extraction, fibres, hydrogel production, etc., all trying to achieve a high-added value. However, mass reduction of waste feathers into useful applications, such as development of alternative building materials, is also an important aspect. To take advantage of feathers’ thermal insulation capabilities, sound damping, and biodegradability, we worked towards mixing waste feathers with wood residues (wood shavings, dust, and mixed residues) for production of composite fibreboards, comparable to the market’s medium density fibreboards. The emphasis was to evaluate waste poultry feathers as the component of natural insulation composites, along with mixed waste wood residues, to improve their mechanical properties. Various composite fibreboards with different shares of wood and feathers were produced and tested for mechanical, thermal, and acoustic properties, and biodegradability, with comparison to typical particle boards on the market. The addition of waste feather fibres into the fibreboards’ structure improved thermal insulation properties, and the biodegradability of fibreboards, but decreased their bending strength. The sound transition acoustic loss results of the presented combination fibreboards with added feathers improved at mid and high frequencies. Finally, production costs are estimated based on small scale laboratory experiments of feather processing (cleaning and drying), with the assumption of cost reduction in cases of large industrial application.