Massive generation of natural waste fiber from agricultural industries followed by improper disposal management might result in a detrimental effect on our ecosystem contributing to various types of environmental pollution. With the growing significance of climate change, an effort is being undertaken by utilizing natural waste fiber into eco-friendly insulation panels to reduce the environmental impact of buildings. In this research, a composite panel was developed from spent mushroom substrate (SMS) and empty fruit bunch (EFB) fibers via a sandwich technique. Five samples were made, each with a different fiber ratio (100 SMS: 0 EFB, 80 SMS: 20 EFB, 60 SMS: 40 EFB, 40 SMS: 60 EFB, and 0 SMS: 100 EFB) at density 0.8 g/cm3. Fourier transformation infrared (FTIR) Soxhlet extraction followed by thermogravimetric analysis (TGA) indicated that the SMS and EFB fibers were relevant for fabrication into a composite panel for thermal insulation. Thermal conductivity, thermal resistance, and thermal diffusivity values for these five composite samples were 0.231 to 0.31 W/(mK), 0.0194 to 0.0260 m2K/W, and 0.2665 to 0.3855 mm2/s, respectively. The flexural strength of the composite was at the range 15.61 to 23.62 MPa. These research findings suggest that the fabrication of a sandwich composite panel from SMS and EFB fiber is a promising alternative way to utilize natural waste fiber.