Sisal fibers are treated with potassium permanganent (KMnO4)—acetone solution for various concentrations for different soaking time period prior to the composite fabrication. Small angle X‐ray scattering (SAXS) and wide angle X‐ray diffraction (WAXD) analysis shows significant change in the macromolecular and the crystallographic parameters of the fiber, respectively, after the treatment. Fiber treated with 0.05% KMnO4‐acetone solution for 2 min (05K2) is found to have highest degree of crystalinity, crystallite size, and bulk density. Enhanced tensile and flexural strength of the 05K2 reinforced epoxy composite (05KC2) is attributed to the increase surface roughness of the fiber. Lower values of dielectric constant (εr), dielectric loss (tan δ) and improved volume resistivity (ρ) for the 05KC2 composite may be due to the hindered molecular motion of the polymeric chains at the composite interface resulting from the better interlocking between the fiber and matrix. © 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 2013