With an increase in environmental pollution and microplastic problems, it is more urgent now to replace non-biodegradable films with biodegradable films that are low-cost and from renewable resources. Cotton gin motes (GM), a type of cellulosic waste that is generated from cotton ginning, is an excellent candidate for fabricating biodegradable films due to its properties and abundance. In this study, GM was first mechanically milled into a fine powder, followed by compounding with polycaprolactone (PCL) and extruded to produce composite pellets which were then compress-moulded into composite films. This environmentally friendly process used physical processing and all the materials were consumed in the process without generating any waste residue. To improve the compatibility and mixing properties between GM and PCL, the use of a plasticiser (polyethylene glycol) was considered. A high content of GM powder (up to 50%) was successfully compounded with the polymer. The SEM images of the composite films showed smooth surface morphology and well-distributed GM powder in the PCL matrix. The added advantage of compounding GM with the polymer matrix was that the composite film developed UV-shielding properties due to the presence of lignin in the GM powder. This property will be critical for films used in UV-resistance applications. Furthermore, the composite even with high GM content (50%), showed good mechanical properties, with 9.5 MPa yield strength and 442% elongation, which was only a 50% decrease in elongation when compared with clear PCL film. The soil biodegradation of GM composite films under controlled temperature (20 °C) and humidity (50%) for 1 month showed around 41% weight loss. Overall, this study demonstrates the potential of GM to be used as a biodegradable and UV-protective composite film for a wide array of applications, such as packaging and UV-protective coverings.