In situ microfibrillar composites (MFCs), with polyolefin elastomer as matrix and poly(lactic acid) (PLA) as dispersed phase, were successfully prepared using multistage stretching extrusion system. Interestingly, a peculiar phenomenon of double yielding was observed on the stress-strain curves of MFCs under tensile loading for the first time. The MFCs with 20 wt% PLA microfibrils exhibited two distinct yield points, and a pronounced hump appeared on the stress-strain curve of PLA-20. Two-dimensional small-angle X-ray scattering analyses showed that the equatorial streak scattering became stronger with increase in PLA microfibrillar content; the meridional scattering trace became stronger with increase in tensile strain for PLA-20. The rheological analysis showed that theG ' of PLA-20 had a plateau in the low frequency region and did not depend on frequency changes.