Biobased fibres of cellulose acetate butyrate (CAB) and cellulose nanocrystals (CNC) and triethyl citrate (TEC) as plasticiser were prepared by melt spinning. To obtain homogeneous dispersion of CNC, two different dispersion techniques were studied. In the first, the water content of the CNC suspension was reduced and exchanged to ethanol using centrifugation. In the second, the water in the CNC suspension was completely exchanged to ethanol by sol–gel process. Results showed that tensile modulus and tensile strength of the nanocomposite fibres produced with the first technique were lower than CAB–TEC fibres, but the fibres produced by the sol–gel process showed an increase in the tensile modulus and had no decrease in the strength. Optical microscopy of the fibres indicated a few aggregations on the sol–gel prepared materials. The results indicate that the sol–gel process is enhancing the dispersion of CNC and can be a suitable way to prepare nanocomposite fibres.