Poly (butylene adipate-co-terephthalate) (PBAT)/thermoplastic starch (TPS) blends were prepared via a melt processing with combined systems of two different plasticizers: TPS with a glycerol and water plasticizer system and sTPS with a glycerol, water, and an epoxidized soybean oil (ESO), plasticizer system. The plasticizing effect on the optimized PBAT/sTPS compositions was evaluated. However, it was difficult to achieve the superior physical properties of hydrophobic PBAT with hydrophilic TPS. The PBAT/sTPS blend exhibited low interfacial energy, maintaining the Young's modulus and elongation at break, but the tensile strength decreased due to the high sTPS content. The addition of PMDA from 0.5 to 2.0 phr confirmed interaction between the anhydride group, the hydroxyl/carboxyl group of PBAT and the hydroxyl group of sTPS through ring-opening reactions. With the addition of 1.0 phr of PMDA, the dispersion of sTPS in the PBAT matrix was improved, leading to effective stress transfer resulting in a 33.77 % increase in tensile strength. Overall, PBAT/sTPS blends with PMDA compatibilizers have proved to have a profound impact on excellent mechanical properties and improved compatibility, suggesting its potential as an attractive alternative to petroleum-based plastics to resolve environmental issues.