Melt blending of PLA and biodegradable PE-b-A has been performed in an effort to toughen the PLA. With the PE-b-A contents increasing, the elongation at break of composites increased and the brittle break became ductile break. When the PE-b-A content is 10%, the tensile strength of composite is similar with neat PLA, and the elongation increased significantly. The composites showed wonderful shape-memory effect. The composites occurred to deformation upon tensile load, and recovered to original shape quickly with temperature increasing. PE-b-A acts as stress concentrator in system with the stress release locally and energy-dissipation process. These will prevent PLA matrix from breaking under high deformation and make the PLA molecular orientation. Consequently, releasing the stress by heating up the material will reform the shape back to the original shape.