Poly(1actic acid) (PLA), chitosan (CS) and their composite have attracted wide attention for the biodegradability and biocompatibility in human body. However, their thermal and chemical stability of the composites require to be improved for broader applications. In this work, poly(1actic acid)/chitosan (PLAlCS) composites were prepared by solution method using polyethylene glycol (PEG) as a compatibilizer. These composites were characterized by Fourier Transform Infrared (FTIR), Differential Scanning Calorimetry (DSC), and Field Emission Scanning Electron Microscopy (FESEM). The hydrolysis of the composites in alkaline environment for different time was investigated. The glass and melting temperature of PLA in PLAICS composites containing PEG (compared with CS weight) are higher than those of PLAICS composites. The lowest weight loss of PLAICS composite containing 40 wt. percent of PEG shows highest stability in alkaline environment.