Pigment extraction from annatto seed results in large amounts of by‐products (~97%) and residual carotenoid content. In this work, composite foam trays containing 90:10 (10AR), 80:20 (20AR), and 70:30 (30AR) cassava starch: annatto residue (AR) ratios were prepared by thermopressing. The physical–chemical properties, thermal stability, antioxidant activity, and biodegradability of the composite foam trays and cassava starch foam tray (control) were measured and compared. High AR ratio (20AR and 30AR) yielded thicker (2.1–2.3 mm), denser (0.72–0.74 g/cm3), and less porous (32.5–33%) composite foam trays than the control due to incomplete cassava starch gelatinization and the presence of fibers, lipids, and proteins in AR. Thus, the composite foam trays had lower mechanical resistance (0.4–0.8 MPa) and elongation (0.4%–0.7%) than the control (2.9 MPa and 1.5%). However, addition of high AR ratio increased the foam tray resistance to water and yielded colorful foam trays with antioxidant property as measured by DPPH• (0.11 to 0.52 μM TE/100 g) and ABTS•+ (7.86–53.77 μM TE/100 g). Increasing the AR ratio in the composite foam tray delayed the biodegradation time by 17 days as compared to the control, but all the foam trays were more biodegradable than EPS. Therefore, AR has potential use in the production of bioactive composite foam trays.