A novel composite yarn was prepared by simple sizing coating using polyester (PET) as core yarn and polyvinyl butyral (PVB) and zirconium carbide (ZrC) suspension as slurry. The scanning electron microscope results revealed the core-shell structure of the composite yarn and ZrC particles deposited on surface coating successfully. The maximum near-infrared absorption rate of the fabric made of PET/PVB/ZrC composite yarn reached 96.42%. The test showed that when exposed to infrared light (dominant wavelength 950 nm), the surface temperature of the composite yarn rose more quickly than that of pure PET yarn. The photothermal conversion property of the composite yarn reached the best when PET yarn was treated in 4 wt% PVB solution with 5 wt % ZrC content. The composite yarn also exhibited good light-to-heat performance in real environment. In addition, PVB/ZrC coating provided the composite yarn excellent ultraviolet (UV) protection (UPF 50+) and produced little effect on thermal stability. Durability tests of PET/5%PVB/4%ZrC composite yarn verified pretty good washing resistance of near-infrared absorption and UV protection properties of the composite yarn. This work provides a simple and economical method for preparing multifunctional composite yarn.