This study addresses the development of a green composite from gypsum and sawdust (SW) using a spray coating technique with water-based epoxy (WBE). A positive effect of SW water extractives on gypsum was observed after the addition of an antifoam agent. Mechanical testing shows that the SW water extractives could increase the flexural and compressive strengths of gypsum by 10% and 7%, respectively. XRD characterization shows that the crystallinity of gypsum is improved by adding SW water extractives. Mechanical testing of the gypsum/SW composites shows that a lightweight composite with promising mechanical performance could be obtained by WBE spray coating; the flexural and compressive strengths of the composite are 4.6 MPa and 13.3 MPa, respectively, for 20% SW addition, and 3.4 MPa and 8.7 MPa, respectively, for 30% SW addition. Attenuated total reflectance-Fourier transform infrared (ATR-FTIR) characterization shows that (1) WBE can be coated on the surface of SW particles by spray coating; (2) the coated WBE can reduce the water uptake of SW. Further analysis with optical microscopy (OM) and Image Pro Plus software demonstrates that the reduction in water uptake leads to an increase in the gypsum covering ratio from 42% to 68%. Field emission gun-scanning electron microscopy (FEG-SEM) characterization again illustrates that WBE coating improves the interfacial properties of SW with gypsum and retains high gypsum adhesion even in high relative humidity (RH) conditions.