Epoxidized linseed oil (ELO) was synthesized and characterized for use as secondary component in bio‐based epoxy copolymer cured with bio‐renewable phenalkamine. Environment friendly biocomposites were developed using unidirectional sisal fibers as reinforcement in epoxy and epoxy‐ELO co‐polymer as matrices. Unidirectional sisal fibers in mat form were incorporated at [0/0] orientation within ELO‐modified epoxy in different composition (10, 20, and 30 phr of ELO) to ensure a proper balance between stiffness and toughness. Tensile, impact and flexural strength of the bio‐based epoxy composites improved significantly for 20, 30, and 10 phr of ELO respectively as compared with unmodified counterpart. The thermomechanical analysis of the biocomposites reveals improved storage modulus and damping on addition of about 10 and 20 phr of ELO bio‐resin. The morphological study shows good interfacial adhesion of matrix and fibers in bio‐based epoxy composite while a poor interface is observed in unmodified epoxy composite. This work paves the way for design and development of sustainable biocomposites of higher bio‐source content (up to 69%) for energy absorbing high strength demanding applications. POLYM. COMPOS., 39:E2595–E2605, 2018. © 2018 Society of Plastics Engineers