It is important to add second- or third-phase materials to improve the physical, mechanical, and biodegradable properties of polypropylene (PP) nanocomposites. A unique hybrid bio-nanocomposite was fabricated using microparticle cellulose powder from wastepaper with a polypropylene (PP) polymeric matrix using a low-shear chaotic mixing method. A small amount (2-5%) of layered micro clay was also added to investigate the hybrid effect of nanocomposite fabrication on the mechanical properties. A low-shear chaotic melt mixing method induces the formation of nano cellulose structures and layered clay nanoparticles by via exfoliation. The nanoparticles were characterized using Fourier transform infrared (FTIR) spectroscopy. Mechanical properties such as the flexural strength (FS) and tensile strength (TS) were investigated using an Izod impact tester (IZ), and a dynamic mechanical testing analyzer (DMTA). Further, scanning electron microscopy (SEM) was used to observe the microstructure of the nanocomposite. In addition, differential scanning calorimetry (DSC) and thermogravimetric analysis (TGA) were conducted to investigate the crystallinity and degradation of the samples, respectively. The addition of wastepaper cellulose powder below 2.5 wt. % did not improve the mechanical properties, however, improvements were observed when more than 5wt.% wastepaper cellulose powder was added. With the addition of a small amount of nano-clay, the mechanical properties were significantly improved, and a synergistic effect could be noticed. The observed results were then compared with PP-clay nanocomposites used in automotive industries to replace cellulose nanocomposites. The application areas can also cover lead production in paper cups and vacuum foaming.