Biodegradable blend films of polylactide (PLA), thermoplastic starch (TPS), and poly(butylene adipate-co-terephthalate) (PBAT) were prepared through reactive modification. Three types of compatibilizers, methylenediphenyl diisocyanate (MDI), maleic anhydride (MA), and MA-g-PE, were studied. PLA and PBAT were blended in the presence of the compatibilizer to improve and evaluate the interfacial interaction. PBAT content was varied from 0 to 20 wt%, while compatibilizer content was differed from 0 to 5 wt% based on PBAT amount. For ternary blending, PLA, TPS, and PBAT were melt-blended with and without compatibilizer in a twin screw extruder using glycerol and tapioca starch as plasticizer and filler, respectively. The effects of type and content of compatibilizer and blend compositions on the physical, thermal, morphological, and tensile properties of the films were investigated. The results showed that the blend films with MDI had appropriate physical, thermal, and tensile properties. The presence of small amount of MDI enhanced the thermal and tensile properties of the films compared to the uncompatibilized films. This can be explained by a uniform morphology of the dispersed phase in the PLA matrix.