The thermal, mechanical, and biodegradation properties of composite materials made from polylactide (PLA) and rice straw fibre (RSF) were evaluated. To improve the properties of PLA/RSF composites, glycidyl methacrylate (GMA)-grafted polylactide (PLA-g-GMA) and treated (crosslinked) rice straw fibre (TRSF) were used to prepare the composites. The result showed that PLA-g-GMA/TRSF had noticeably superior mechanical properties compared with PLA/RSF because of greater compatibility between the polymer and TRSF. The dispersion of TRSF in the PLA-g-GMA matrix was more homogeneous, because branched and crosslinked macromolecules formed via condensation of the glycidyl methacrylate groups of PLA-g-GMA and the hydroxyl groups in TRSF. In addition, the PLA-g-GMA/TRSF composites were more easily processed because of their lower melt viscosities. The water resistance of PLA-g-GMA/TRSF was higher than that of PLA/RSF, although the weight loss of composites buried in soil compost indicated that both were biodegradable, especially at high levels of RSF substitution. The PLA/RSF and PLA-g-GMA/TRSF composites were more biodegradable than was pure PLA.