This study investigates the mechanical, thermal, and water absorption properties of high-density polyethylene (HDPE) composites filled with barley straw and varying amounts of waste rubber. The research aims to develop sustainable materials that repurpose agricultural and industrial waste while addressing resource scarcity and waste management challenges. Composites were prepared using a twin-rotor mixer and hydraulic press, with waste rubber content varying from 0 to 20 wt%. Mechanical properties were evaluated through tensile testing, thermal behavior was analyzed using TGA, DTG, and DSC, and long-term water absorption was measured. Results show that increasing waste rubber content from 0 to 20% led to a decrease in tensile strength (11.3 to 8.9 MPa) and tensile modulus (1760 to 790 MPa), while relative extension increased (2.4–5.9%). Thermal analysis revealed a slight reduction in onset degradation temperature (270 °C to 240 °C) and increased char residue (8–18%) with higher rubber content. Water absorption decreased significantly, from 12 to 13% to 6–7% after 600 h of immersion, as waste rubber content increased. These findings demonstrate that incorporating waste rubber into HDPE/barley straw composites results in materials with enhanced flexibility and water resistance at the cost of some strength and stiffness. In conclusion, the results of this study offer a clear pathway for the development of sustainable polymer composites that have broad potential applications across industries like construction, marine infrastructure, automotive, and packaging. By replacing traditional, resource-intensive materials with eco-friendly alternatives, these composites not only provide functional benefits but also support global efforts toward sustainable development and environmental conservation.