The purpose of this study is to create a natural fiber-reinforced fully green composite with excellent toughness. By treating ramie plied yarns in a high concentration alkali solution, the reinforcements were mercerized. Results of tensile tests showed that unidirectional composites using mercerized ramie yarns exhibited two to three times larger fracture strain, without a marked decrease in strength, than composites using untreated yarns. In addition, mercerization for the ramie yarns brings a better interfacial strength to the composites. Laminated composites using mercerized ramie yarns also showed approximately twice larger impact energy than composites using untreated yarns. Thus, mercerization for natural fibers is expected for application to mechanical materials requiring a high toughness.