An attempt has been made to enhance the properties and applications of gypsum ceiling tiles by utilizing the excellent thermal insulation and flame resistance properties of wool and the durability and strength of coir. Gypsum based ceiling tiles are ubiquitously used for false ceiling applications but have several limitations. Different types of additives, finishes and chemicals have been used to overcome the lack of structural integrity under large impacts, poor resistance to moisture and limited acoustic resistance of gypsum ceiling tiles. Few studies have shown that reinforcing gypsum with natural materials provides better performance properties. Wool and coir are biodegradable natural fibers that are available in large quantities at low costs and have some unique properties suitable for developing green building materials. In this study a blend of wool and coir were used to enhance properties and performance of gypsum ceiling tiles. Composites were manufactured by using 30% fiber and 70% gypsum and varying the proportion of wool and coir between 25–75%. The reinforcing fibers were combined with gypsum using water and no other chemical or additives are necessary, making the production of tiles simple and environmentally friendly. Fiber reinforced gypsum showed higher strength (up to 90% higher) and modulus (up to 7%) and also better resistance to moisture. Wool fibers provided substantially higher moisture resistance while coir provided better strength. A blend of the two fibers provided a flame resistance rating of V1 compared to V0 for pure gypsum. Reinforcing gypsum with coir and wool would not only improve thermal and acoustic properties but will also help to reduce cost and make a major portion of the gypsum ceiling tiles biodegradable and thereby decrease environmental burden and helps towards promoting green building initiatives