<p>Natural fiber composite materials are vital in moving toward sustainable development. The primary characteristics of natural composites are to have a comparable strength-to-weight ratio, with degradation behavior. Even though the natural fiber composite offers environmental benefits, its exposure to moisture drastically affects its performance, with fracture characteristics being vital. The primary objective of the study is to determine the stress intensity factor (SIF) under mode I (tensile opening) and mode II (shear) loading of banana-sisal (BS) composites, considering under moisture diffusion. In this work, the effect of moisture diffusion is studied by conducting accelerated moisture absorption test, via immersing the composite material in distilled water under controlled condition. In addition, the feasibility of replacing the conventional epoxy with cardanol-based bio-epoxy as matrix material is also studied, which enhances the sustainability of the composite material. The testing was carried out using Arcan fixtures for both dry and wet specimen with various crack length (<i>a</i>/<i>W</i> = 0.1 and 0.3) to determine the stress intensity factors (SIF), K_I and K_II. The SIFs for bio-epoxy composites are higher compared to epoxy composites in both dry and wet conditions, indicating the higher resistance offered by bio-epoxy composite for crack propagation. Particularly in wet condition for mode II loading, bio-epoxy has higher SIF for 0.3 a/W, with 1.14 MP.√m for bio-epoxy compared to 0.79&#xa0;MPa.√m for epoxy composite specimen. In both bio-epoxy and epoxy composites, the moisture diffusion decreases the critical values of K_IC and K_IIC compared to dry ones, which is mainly due to the degradation of fiber/matrix bonding. Based on SEM analysis, the failure under mode I is predominated by fiber breakage, whereas under mode II is predominated by fiber pull out.</p>