An attempt has been made in the present work to develop hybrid blended composites using epoxy resin (PETEP) derived from waste polyethylene terephthalate (PET) bottles and bio-phenolic (cardanol)-based benzoxazine (CBz) reinforced with functionalized bio-carbon (f-PJC) obtained from Prosopis juliflora (PJ) for high performance applications. The molecular structure, thermal properties, thermo-mechanical behaviour, morphology, surface properties, and corrosion resistance of the composites were studied by different analytical methods, and the obtained results are reported. Dynamic mechanical properties such as the storage modulus (2.591 GPa), loss modulus (1.299 GPa) and cross-linking density (5.1 × 10 7 J mol −1 K −1 ) were improved in the case of the 5 wt% f-PJC/PETEP–CBz composite compared to those of the PETEP–CBz blended matrix and the f-PJC/PETEP–CBz composites with other weight percentages. Among the studied bio-carbon-reinforced hybrid composites with different weight percentages, the 5 wt% f-PJC/PETEP–CBz composite shows a higher value of char yield (38.37%), with an enhanced glass transition temperature of 285 °C and an improved water contact angle of 111.3°. Results obtained from corrosion studies infer that these hybrid composites exhibit improved corrosion resistance behaviour and effectively protect the surface of mild steel specimens from corrosion. It is concluded that the present work can be considered as an effective method for utilizing waste products and sustainable bio-materials for the development of high performance value-added hybrid composites for thermal and corrosion protection applications.