In this study the effect of the mercerization degree on the water retention value (WRV) and tensile properties of compression molded sulphite dissolving pulp was evaluated. The pulp was treated with 9, 10, or 11 % aqueous NaOH solution for 1 h before compression molding. To study the time dependence of mercerization the pulp was treated with 12 wt% aqueous NaOH for 1, 6 or 48 h. The cellulose I and II contents of the biocomposites were determined by solid state cross polarization/magic angle spinning carbon 13 nuclear magnetic resonance (CP/MAS 13C NMR) spectroscopy. By spectral fitting of the C6 and C1 region the cellulose I and II content, respectively, could be determined. Mercerization decreased the total crystallinity (sum of cellulose I and cellulose II content) and it was not possible to convert all cellulose I to cellulose II in the NaOH range investigated. Neither increased the conversion significantly with 12 wt% NaOH at longer treatment times. The slowdown of the cellulose I conversion was suggested as being the result from the formation of cellulose II as a consequence of coalescence of anti-parallel surfaces of neighboring fibrils (Blackwell et al. in Tappi 61:71-72, 1978; Revol and Goring in J Appl Polym Sci 26:1275-1282, 1981; Okano and Sarko in J Appl Polym Sci 30:325-332, 1985). Compression molding of the partially mercerized dissolving pulps yielded biocomposites with tensile properties that could be correlated to the decrease in cellulose I content in the pulps. Mercerization introduces cellulose II and disordered cellulose and lowered the total crystallinity reflected as higher water sensitivity (higher WRV values) and poorer stiffness of the mercerized biocomposites.