Natural fibre reinforced PLA composites are a 100% biobased material with a promising mechanical properties profile. However, natural fibres are hygroscopic whereas PLA is sensitive to hydrolytic degradation under melt processing conditions in the presence of small amounts of water. Here, we determine the effect of water content in undried and dried natural fibres on semi crystalline grade PLA degradation during processing as well as on the composite’s mechanical performance. The fibres evaluated are ramie, flax and cotton, containing 6–9 mass% moisture in the undried state and 0.2–0.4 mass% in the dried state. Intrinsic viscosity and melt flow index analysis indicate that the effect of the different levels of moisture in the fibres have a similar and small effect on PLA degradation, PLA hydrolysis appears rather affected by fibre diameter. Morphology, flexural strength and stiffness and Charpy impact of the composites are not significantly affected by the water present in the undried fibres.