Plastic recycling to make sustainable materials is considered one of the biggest initiatives toward a greener environment and socioeconomic development. This research aims to investigate the properties of a blend of recycled bale wrap linear low-density polyethylene (rLLDPE) and polypropylene (PP) (rLLDPE/PP 50:50 wt % matrix), which was further reinforced with 25 wt % agave fiber prepared by injection-molding. Different ratios of a combined industrial compatibilizer (maleic anhydride-grafted PP/PE) were used (1–3 wt %), which were compared with a synthesized compatibilizer made from maleic anhydride–PP/rLLDPE in terms of mechanical and thermomechanical properties of the biocomposites. Incorporation of the compatibilizer in the composite improved the interfacial adhesion between the hydrophobic matrix and the hydrophilic agave fiber, which further increased the mechanical properties and heat deflection temperature of the composite. Scanning electron microscopy showed enhanced compatibility and adhesion between the fiber and the matrix by inclusion of 2 wt % compatibilizer. The synthesized compatibilizer-blended composite showed better mechanical properties than the industrial one, which indicates the potential application of this composite (around 62% recycled material) in the manufacture of packaging materials and commodity products.