Poly(lactic acid) (PLA) is a biodegradable polymer, but its applications are limited by its high cost. Blending granular starch with PLA reduces the cost, but the blend has poor strength properties. In this study, a 55/45 (w/w) mixture of PLA (weight-average molecular weight = 120,000 Da) and dried wheat starch was blended thermally in an intensive mixer with or without a low level of methylenediphenyl diisocyanate (MDI), Blends with MDI had enhanced mechanical properties that could be explained by the in situ formation of a block copolymer acting as a compatibilizer. Scanning electron micrographs showed reduced interfacial tension between the two phases. The presence of MDI also enhanced the mechanical properties of the blend at temperatures above the glass-transition temperature. Water uptakes by the PLA/starch blends with and without MDI did not differ.