Poly(ϵ-caprolactone) (PCL) is a ductile thermoplastic, which is biodegradable in the marine environment. Limitations include low strength, petroleum-based origin, and comparably high cost. Cellulose fiber reinforcement is therefore of interest although uniform fiber dispersion is a challenge. In this study, a one-step wet compounding is proposed to validate a sustainable and feasible method to improve the dispersion of the cellulose fibers in hydrophobic polymer matrix as PCL, which showed to be insensitive to the presence of the water during the processing. A comparison between unmodified and acetylated cellulosic wood fibers is made to further assess the net effect of the wet feeding and chemical modification on the biocomposites properties, and the influence of acetylation on fiber structure is reported (ATR-FTIR, XRD). Effects of processing on nanofibrillation, shortening, and dispersion of the cellulose fibers are assessed as well as on PCL molar mass. Mechanical testing, dynamic mechanical thermal analysis, FE-SEM, and X-ray tomography is used to characterize composites. With the addition of 20 wt % cellulosic fibers, the Young's modulus increased from 240 MPa (neat PCL) to 1850 MPa for the biocomposites produced by using the wet feeding strategy, compared to 690 MPa showed for the biocomposites produced using dry feeling. A wet feeding of acetylated cellulosic fibers allowed even a greater increase, with an additional 46% and 248% increase of the ultimate strength and Young's modulus, when compared to wet feeding of the unmodified pulp, respectively.