This study explores the valorization of non-commercial chestnut waste from the Portuguese chestnut industry to develop biocomposites. The composites were obtained by hot compression molding, and a Box-Behnken Design model was employed to optimize the mechanical, thermal, and water resistance properties of the chestnut-based composite, using fruit and shell fibers, respectively, as the polymeric matrix and reinforcement agent. The optimal formulation, comprising 70% chestnut, no glycerol, a molding temperature of 120 °C, and applying a pressure of 2.93 MPa for 30 min, achieved a Flexural Strength of 9.00 MPa and a Flexural Modulus of 950 MPa. To enhance water resistance, shellac was added as a natural hydrophobic coating. Water interaction tests indicated that shellac-treated biocomposites exhibited superior water resistance, absorbing approximately two times less water than those containing glycerol or untreated samples. Thermal analysis revealed that glycerol acted as a plasticizer, improving flexibility and reducing the glass transition temperature. Additionally, the chestnut-based biocomposite demonstrated an out-of-plane thermal conductivity of 0.79 W/m·K, categorizing it as a thermal insulator. The final prototype application was a candle holder, showcasing the potential for the practical and sustainable use of chestnut-based composite. This research highlights the potential for chestnut waste to be repurposed into eco-friendly products, offering an alternative to conventional plastics and contributing to a circular economy.