In this study, nonpolar octyl gallate (OG), dodecyl gallate (DG), and octadecyl gallate (OCG) were grafted onto the surface of hydrophilic jute fabrics, which were mediated by horseradish peroxidase to improve the hydrophobicity of jute materials. The gallate-grafted jutes were characterized by infrared spectroscopy and grafting percentage (Gp), and the hydrophobic properties were evaluated by water contact angle and wetting time measurements. The Gps determined by saponification was 3.91%, 5.12%, and 4.58% for OG, DG, and OCG, respectively. The nonpolar chain length and the grafting rate of the monomers had a considerable effect on the hydrophobicity of the modified jute fabrics. The as-prepared hydrophobized jute fabrics had superior interfacial compatibility with nonpolar resins, such as polypropylene (PP) and polylactic acid (PLA) making them most suitable to be utilized in the development of jute fiber-reinforced thermoplastic composites. The tensile and dynamic mechanical properties of the grafted jute/PP or jute/PLA composites were improved compared with pure PP, PLA, and non-modified jute composites.