The properties of blends of polycaprolactone and starch (PCL/starch) and maleic anhydride (MAH)-grafted-polycaprolactone and starch (PCL-g-MAH/starch) were examined using Fourier transform infrared (FTIR) spectroscopy, H-1 nuclear magnetic resonance (H-1 NMR), differential scanning calorimetry (DSC), and mechanical testing. Mechanical and thermal properties of PCL became noticeably worse when it was blended with starch, due to the poor compatibility between the two phases. The greater compatibility of PCL-g-MAH with starch, owing to the formation of an ester carbonyl group, led to a much better dispersion and homogeneity of starch in the PCL-g-MAH matrix and consequently to noticeably better properties. Furthermore, with a lower melt temperature, the PCL-g-MAH/starch blend is more easily processed than PCL/starch. Both blends were buried in soil to assess biodegradability. Water resistance of PCL-g-MAH/starch was higher than that of PCL/starch, although weight loss of blends buried in soil indicated that both were biodegradable, even at high levels of starch substitution. In soil, the mechanical properties of both blends, such as tensile strength and elongation at break, also deteriorated. (C) 2003 Elsevier Science Ltd. All rights reserved.