Use of fiber reinforced composites derived from renewable sources has increased in recent years, aiming at a balance between sustainability and technological development. This research sought to develop poly (lactic acid) (PLA)/poly (ε-caprolactone) (PCL) composites using wood powder (WP) as reinforcement. The composites were initially prepared in a co‐rotational twin‐screw extruder, and the extruded granules were then molded by injection. Mechanical properties (impact, traction, Shore D hardness), heat deflection temperature (HDT), differential scanning calorimetry, contact angle, and analysis with scanning electron microscopy were evaluated. ANSYS® computer simulation for mechanical performance of the materials was used to assess the performance of disposable cups. Impact strength for PLA/PCL bioblend and PLA/PCL/WP composites was higher than neat PLA. In addition, Shore D hardness, elongation at break, and HDT were on the same level as PLA, indicating that high WP concentrations did not severely compromise these properties. However, losses were observed in elastic modulus and tensile strength, and the PLA/PCL/WP composites increased the interaction with water, as reflected in the contact angle. From a practical standpoint, and as verified in the simulation, mechanical performance of the composites was satisfactory for the manufacture of disposable cups. The results are valuable for the area of recycling since it is possible to reuse and add value to a discarded material, thereby reducing costs and promoting sustainability.