Cotton stalk bark fibers (CSBF) with low lignin content were prepared from combined treatments with bacteria and alkali, processed into blended yarns and knitted fabrics, and dyed with reactive dyes. CSBF previously extracted using alkali and peroxide at atmospheric pressure were coarse (>45 dtex) or contained high lignin content (>11.8%), which limited their industrial applications in textiles. We found that alkali removed lignin more thoroughly at 130 °C, especially with the assistance of bacteria pretreatment. Fibers after bacteria and alkali treatments had fineness reduced to 24.0 dtex and lignin content decreased to 3%. CSBF/cotton blended yarns from our CSBF had better evenness and breaking strength than jute/cotton blends. Fabrics from CSBF/cotton blended yarns had higher bursting strength, softer and smoother handle compared to the fabrics of jute/cotton blends. Dye sorption of Reactive Red 120 on CSBF was 15.7% higher than that on cotton. Dyed fabric of CSBF/cotton blends had the same laundering and light colorfastness, but slightly lower staining and wet crocking colorfastness than 100% cotton fabric. Overall, CSBF in our study could be used as a good alternative to traditional bast fibers for highly valuable textile applications. The research results will not only enhance the sustainability of fiber industry but also alleviate the environmental pressure.