Classical field retting and controlled fungal retting of hemp using Phlebia radiata Cel 26 (a mutant with low cellulose degrading ability) were compared with pure pectinase treatment with regard to mechanical properties of the produced fibre/epoxy composites. For field retting a classification of the microbial evolution (by gene sequencing) and enzyme profiles were conducted. By phylogenetic frequency mapping, different types of fungi, many belonging to the Ascomycota phylum were found on the fibres during the first 2 weeks of field retting, and thereafter, different types of bacteria, notably Proteobacteria, also proliferated on the field retted fibres. Extracts from field retted fibres exhibited high glucanase activities, while extracts from P. radiata Cel 26 retted fibres showed high polygalacturonase and laccase activities. As a result, fungal retting gave a significantly higher glucan content in the fibres than field retting (77 vs. 67%) and caused a higher removal of pectin as indicated by lower galacturonan content of fibres (1.6%) after fibres were retted for 20 days with P. radiata Cel 26 compared to a galacturonan content of 3.6% for field retted fibres. Effective fibre stiffness increased slightly after retting with P. radiata Cel 26 from 65 to 67 GPa, while it decreased after field retting to 52 GPa. Effective fibre strength could not be determined similarly due to variations in fibre fracture strain and fibre-matrix adhesion. A maximum composite strength with 50 vol% fibres of 307 MPa was obtained using P. radiata Cel 26 compared to 248 MPa with field retting.