Multifunctional lightweight, flexible, yet strong polymer-based nanocomposites are highly desired for specific applications. However, the control of orientation and dispersion of reinforcing nanoparticles and the optimization of the interfacial interaction still pose substantial challenges in nanocellulose-reinforced polymer composites. In this study, poly(ethylene glycol) (PEG)-grafted cellulose nanofibers have demonstrated much better dispersion in a poly(lactic acid) (PLA) matrix as compared to unmodified nanocellulose. Through a uniaxial drawing method, aligned PLA/nanocellulose nanocomposites with high strength, high toughness, and unique optical behavior can be obtained. With the incorporation of 0.1 wt % of the PEG-grafted cellulose nanofibers in PLA, the ultimate strength of the aligned nanocomposite reaches 343 MPa, which is significantly higher than that of other aligned PLA-based nanocomposites reported previously. Moreover, its ultimate strength and toughness are enhanced by 39% and 70%, respectively, as compared to the aligned nanocomposite reinforced with unmodified cellulose nanofibers. In addition, the aligned nanocomposite film is highly transparent and possesses an anisotropic light scattering effect, revealing its significant potential for optical applications.