Soy protein based plastics have been processed in the past by researchers for various short-term applications; however a common issue is the high water sensitivity of these plastics. This work concentrates on resolving this water sensitivity issue of soy protein polymers by employing chemical and mechanical interaction at the molecular level during extrusion. The primary chemical interactions employed were anhydride chemistries such as maleic anhydride (MA), phthalic anhydride (PTA), and butylated hydroxyanisole (BHA). These were respectively used in conjunction with glycerol as a plasticizer to produce relatively water stable soy protein based plastics. Formulations with varying additive levels of the chemistries were extruded and injection molded to form the samples for characterization. The additive levels of anhydrides were varied between 3-10% tw/tw (total mass). Results indicated that phthalic anhydride formulations resulted in highest water stability. Plastic formulations with concentration up to 10% phthalic anhydride were observed to have water absorption as low as 21.5% after 24 hrs of exposure to water with respect to 250% for the control formulation. Fourier transform infrared spectroscopy (FTIR) was utilized to characterize and confirm the fundamental mechanisms of water stability achieved by phthalic and maleic anhydride chemistries. In addition, the anhydride formulations were modified by inclusion of cotton fibers and pretreated cotton powder in order to improve mechanical properties. The incorporation of cotton fibers improved the dry strength by 18%, but did not significantly improve the wet state strength of the plastics. It was also observed that the butylated-hydroxy anisole (BHA) formulation exhibited high extension values in the dry state and had inferior water absorption properties in comparison with anhydride formulations.