The use and disposal of traditional fiber-reinforced polymer composites is an important environmental challenge as one of the factors contributing to worsening climate change. The primary objective of this research is to synthesize thermoplastic starch (TPS) from edible banana skins which can potentially be used as a matrix to produce bio-composite films. For the synthesis of TPS, the preparation of banana peels was performed followed by plasticization to obtain the banana peels TPS. For bio-composite film fabrication, the TPS was mixed with short false banana fibers (FBF) (10–30% by weight of the film) with an electronic blender to form a uniform dispersion of the fibers in the TPS. The FBF/TPS blend was applied uniformly on the surface of the rectangular metal mold. The autoclave method has been adopted for curing and molding the bio-composite film. Then, it was hot pressed varying the temperature and pressure from 131–141 OC to 3–6 MPa, respectively, to obtain the final cured film. The specimen was then solidified or hardened at ambient temperature. Finally, optimization of process parameters, fiber content, and their interaction effects on the tear strength, tensile strength, and bending modulus of the bio composite films were conducted using response surface methodology. The results indicate that both the effects of one factor and the interaction of factors have a significant effect on the mechanical properties of composite films. The optimum processing parameters for TPS production are a temperature of 50 OC and a drying time of 24 h. The optimal result indicates that, at 30% fiber loading, the optimum processing temperature and pressure are 135.14°C and 4.33 MPa, respectively, resulting in a composite film with good mechanical properties.