Cashew nut shell liquid (CNSL) provides wheat gluten films with mechanical properties similar to but considerably higher resistance to water than glycerol-plasticized films. Obtaining biopolymeric films with good water stability without using synthetic polymers or extensive chemical modifications is a challenge. Wheat gluten is a preferred protein for manufacturing films for food and nonfood applications, but obtaining water-stable gluten films is difficult. Glycerol and other plasticizers have been extensively used to develop films, but these plasticizers inevitably decrease strength and resistance to water. CNSL is a byproduct obtained during processing of cashew nuts and is available in large quantities at low cost. In this research, we studied the possibility of substituting CNSL for glycerol as the plasticizer for wheat gluten films. Wheat gluten was compression molded into films with 10%, 20%, or 30% CNSL or glycerol, and the changes in mechanical properties, stability in water, thermal behavior, and surface wettability were determined. It was observed that CNSL provided similar strength, 80 to 100 times higher modulus, and considerably higher resistance to water but lower elongation compared to glycerol-treated films. It was possible to obtain films with the desired mechanical properties and water stability by controlling the amount of CNSL and processing conditions. Wheat gluten can be converted into completely biodegradable cups, containers, coffee pods, and other bioproducts using this approach.