Horseradish peroxidase (HRP)/H2O2 system catalyzes the free-radical polymerization of aromatic compounds such as lignins and gallate esters. In this work, dodecyl gallate (DG) was grafted onto the surfaces of lignin-rich jute fabrics by HRP-mediated oxidative polymerization with an aim to enhance the hydrophobicity of the fibers. The DG-grafted jute fibers and reaction products of their model compounds were characterized by matrix-assisted laser desorption/ionization mass spectrometry (MALDI-TOF MS), attenuated total reflection Fourier transform infrared spectroscopy (ATR-FTIR), X-ray photoelectron spectroscopy (XPS), scanning electron microscopy (SEM), thermogravimetric analysis (TGA), and differential scanning calorimetry (DSC). The results clearly indicated the grafting of DG to the jute fiber by HRP. Furthermore, the hydrophobicity of jute fabrics was determined by measuring the wetting time and static contact angle. Compared to the control sample, the wetting time and static contact angle of the grated fabrics changed from 1 s to 1 h and from 0A degrees to 123.68A degrees, respectively. This clearly proved that the hydrophobicity of jute fabrics improved considerably. Conditions of the HRP-catalyzed DG-grafting reactions were optimized in terms of the DG content of modified jute fabrics. Moreover, the results of breaking strength and elongation of DG-grafted jute/polypropylene (PP) composites demonstrated improved reinforcement of the composite due to enzymatic hydrophobic modification of jute fibers.