The biodegradability and mechanical and thermal properties of composite materials made from glycidyl methacrylate-grafted poly(butylene succinate) (PBS-g-GMA) and palm fibre (PF) were evaluated. Composites of PBS-g-GMA and PF (PBS-g-GMA/PF) exhibited noticeably superior mechanical properties compared with those of PBS/PF, due to greater compatibility of PBS-g-GMA with PF. The dispersion of PF in the PBS-g-GMA matrix was highly homogeneous as a result of condensation reactions. In addition, the PBS-g-GMA/PF composites were more easily processed due to their lower melt torque. The water resistance of PBS-g-GMA/PF was higher than that of PBS/PF, although the weight loss of composites buried in soil compost indicated that both were biodegradable, especially at high levels of PF substitution. The PBS/PF and PBS-g-GMA/PF composites were more biodegradable than pure PBS, which implies a strong connection between PF content and biodegradability.