An AB-type block copolymer composed of alpha -acetalpoly(ethylene glycol) (PEG) as the hydrophilic segment and polylactide (PLA) as the hydrophobic segment was synthesized and utilized to construct a functionalized PEG layer possessing a reactive aldehyde group at the free end of the tethered PEG chain by simple coating on polylactide substrates. Detailed characterization of the functionalized PEGylated surfaces was done from the physicochemical (contact angle and zeta potential) as well as the biological (protein adsorption) point of view to highlight their potential utility as biofunctional interfaces. The amount of protein adsorption was inversely correlated with the degree of water structuring around the PEG molecules, which facilitates the formation of a strongly bound water film to increase the surface hydration. For these surfaces investigated, the extent of surface hydration was more important in determining the materials biocompatibility rather than the actual PEG molecular weight, as evidenced by an extremely low receding contact angle directly related to the adhesive energy of a water molecule. Furthermore, the contact angle relaxation less than a few minutes proved to be determinant for the receding contact angle and resultant hysteresis, caused by rearrangement of the hydrophilic PEG component. Aldehyde groups were confirmed to be present at the tethered PEG chain end using an electron spin resonance probe and can be derivatized with bioactive molecules with amino or hydrazide functionality. The functionalized PEG layer thus prepared on a biodegradable polylactide surface has both nonfouling and ligand-binding properties and may have promising utility as engineered biomaterials including tissue engineering scaffolds.