We report a technique to improve the mechanical performance of aligned fiber‐reinforced polymer‐matrix composites utilizing a twistless wrap‐spun yarn structure. Conventional wrap‐spinning technology introduces crimps to the yarn structure, which is a source of fiber misalignment in the final composites. Here, we report a twistless wrap‐spun yarn constructed from flax fibers and an extensible wrapping filament so that the yarn crimp can be removed during composite fabrication. This is achieved by applying a prestrain to the yarn while the resin is being cured during compression molding. The study demonstrates that this manufacturing technique can be simply and efficiently utilized to produce highly aligned and twistless natural fiber yarn‐reinforced polymeric composites with up to 25% and 45% improvements in mechanical properties.