Inspired by the growing environmental awareness by all, there is a deliberate interest in finding new materials that are biodegradable and environmental friendly. Therefore materials derived from natural resources are studied extensively now days. Preparation of novel bio-nanocomposites based on biopolymers has drawn specific attention. It is expected that these type of nanocomposites will open new areas for medical, packaging and electronic applications. This presentation will deal with a novel processing technology of bio-nanocomposites based on cellulose whiskers and different biopolymers. Processing techniques for nanostructured materials includes drying, feeding and blending techniques. Characterization of the structure of nanocomposites will also be presented. Nanowhisker dispersion and size has shown to be difficult to characterize since both the matrix and reinforcement are soft, non-conductive and light materials. Cellulose nanowhiskers isolated from wooden source, by acid hydrolysis, have a size about 5 nm in width and 200-300 nm in length. These whiskers were blended with polylactic acid (PLA) and cellulose acetate butyrate (CAB) by melt compounding to achieve bio-nanocomposites. The composites mechanical and thermal properties as well as the nanostructure of cellulose whiskers and composites will be presented.