The circular economic approach in polymer composite research has gained acceptance for offering low-cost, high-performance solutions. Sawdust-derived composites have drawn interest as alternatives in concrete and composite fabrication, addressing housing shortages and resource depletion. Sawdust concrete (SDC) and sawdust polymer composites (SDPC) are key areas under investigation, with SDC additionally aiding in carbon reduction in building materials. However, challenges arise due to sawdust’s inherent hydrophilicity, porosity, and lower strength. This study introduces a novel approach by identifying specific chemical treatments, including alkali and silane, which effectively enhance sawdust’s compressive and tensile strengths, moisture resistance, and durability, optimizing it for structural applications. The study evaluates SDC’s compressive strength based on treatment type, concentration, and curing time, examining physical properties such as water absorption, moisture sensitivity, and fiber-matrix adhesion. The unique contribution lies in a detailed optimization analysis, revealing conditions under which sawdust reaches structural-grade performance, expanding its potential in sustainable construction. For SPDC, tensile strength improvements are assessed under various chemical compositions, showing that specific polymers form stronger fiber-matrix bonds for greater stability. Morphological studies further explore fiber-matrix compatibility, hydrophobicity, and failure mechanisms. By advancing the understanding of treatment efficacy, this review positions sawdust as a viable, low-cost material alternative, establishing a foundation for sustainable innovation in construction and bio-composite research. These findings contribute to sawdust’s potential as a practical, eco-friendly building material.