aTo improve the compatibility between rice straw and reinforcing polymers, rice straw (RS) was pretreated by an anaerobic process, and its biogas residues (BR) were acetylated with acetic anhydride (AA) to prepare acetylated biogas residues (ABR). The optimum conditions of acetylation were determined by orthogonal experiments. When acetylation was performed at 140 °C with 10 mL AA/g BR and 0.08 g catalyst/g BR, the maximum weight gain rate (WGR) obtained was 23.7%. Fourier transform infrared (FTIR) analysis showed that many hydroxyl groups were displaced by acetoxy groups. Scanning electron microscopy (SEM) showed that many defects of BR were filled by the acetylation, and an ester layer was formed over the BR surface. However, the lower crystallinity of ABR than the BR and RS affected the mechanical properties of acetylated biogas residue/low density polyethylene (ABR/LDEP) composite. Interestingly, the BR and ABR showed higher onset decomposition temperature, but they exhibited faster decomposition rates because of the lower crystallinity of BR and ABR. Furthermore, the mechanical properties of the RS/LDEP, BR/LDEP, and ABR/LDEP composites were analyzed. Compared with RS/LDEP composites, the BR/LDEP and ABR/LDEP composites showed obviously better tensile and flexural properties. Consequently, rice straw fibers attained excellent compatibility with non-polar polymers.