To reduce the antagonistic effect of jute fibre on the setting and hydration of jute reinforced cement, modified jute fibre reinforcement would be a unique approach. The present investigation deals with the effectiveness of mild alkali treated (0.5%) jute fibre on the setting and hydration behaviour of cement. Setting time measurement, hydration test and analytical characterizations of the hardened samples (viz., FTIR, XRD, DSC, TGA, and free lime estimation) were used to evaluate the effect of alkali treated jute fibre. From the hydration test, the time (t) required to reach maximum temperature for the hydration of control cement sample is estimated to be 860 min, whilst the time (t) is measured to be 1040 min for the hydration of a raw jute reinforced cement sample. However, the time (t) is estimated to be 1020 min for the hydration of an alkali treated jute reinforced cement sample. Additionally, from the analytical characterizations, it is determined that fibre-cement compatibility is increased and hydration delaying effect is minimized by using alkali treated jute fibre as fibre reinforcement. Based on the analyses, a model has been proposed to explain the setting and hydration behaviour of alkali treated jute fibre reinforced cement composite.