<p>Stubble burning in agricultural regions significantly contributes to air pollution and environmental degradation, representing both an ecological concern and a missed opportunity for resource recovery. Addressing this issue, the present research explores the development of rice straw-based composite panels as a sustainable alternative for false ceiling applications in building construction. The aim is to create a biodegradable, and mechanically durable material that enhances environmental sustainability and meets performance standards. The composite was fabricated using chopped rice straw and commercially available formaldehyde-based epoxy resin to improve bonding and structural integrity. Mechanical properties including tensile, compressive, and flexural strengths were evaluated. Results indicated that, in terms of mechanical performance, the rice straw composite outperformed traditional materials (gypsum), with a flexural strength of <i>4.41 MPa</i> (vs. <i>2.18 MPa</i>), tensile strength of <i>1.28 MPa</i> (vs. <i>0.77 MPa</i>), and compressive strength of <i>3.56 MPa</i> (vs. <i>1.92 MPa</i>). These findings demonstrate the material’s potential for non-structural applications. Overall, this study highlights the viability of rice straw-based composites as an eco-friendly, cost-effective solution for building interiors. It offers an innovative pathway to reduce reliance on synthetic materials while valorizing agricultural waste in an environmentally responsible manner.</p>