Polypropylene (PP)-Flyash (FA) composites containing natural banana fiber (NF) treated by Maleic anhydride and NaOH are reported here. Mechanical properties such asflexural modulus and impact strength were improved considerably which were maximum for 20% fly ash filled PP-NF treated composites. There is extensive nucleation of theα crystalline phase of PP in presence of the additives. This changed to mixed α phase with slight β content in presence of FA and treated NF as confirmed by XRD and DSC. The results on the mechanical properties have been explained on the basis of structure development of PP in presence of fly ash and treated NF. The results have also been analyzed with the help of different models for filled polymer composites and using rule of mixtures of two composites to form final ternary hybrid composite. Some agreement is found if a factor is introduced for redistribution of fibers due to added FA as third component. However, the synergistic behavior at certain composition can be explained on the basis of crystalline structure and nucleation due to the additives.