Polycaprolactone (PCL) is a basic substance for biomedical materials and especially for scaffolds in tissue engineering. To improve the performance of PCL-based materials, we filled a PCL matrix with a biocompatible polysaccharide-grafted PCL, chitosan-g-polycaprolactone (CS-g-PCL). The results showed that the strength, elongation, and Young's modulus of the resultant composites were simultaneously enhanced in contrast with those of neat PCL. The structures of the PCL/CS-g-PCL blends were investigated with Fourier transform infrared, X-ray diffraction, differential scanning calorimetry, dynamic mechanical analysis, and scanning electron microscopy, and the effects of the chitosan (CS) content in CS-g-PCL and the CS-g-PCL content in the blends on the mechanical properties and structures of the blends were examined. The rigidity of CS chains and the increasing crystallinity induced by the nucleation of CS-g-PCL contributed to the enhancement of the strength, whereas the cocontinuous interfacial structure and improved miscibility between CS and PCL matrix mediated with grafted PCL chains greatly enhanced the elongation of the composite materials. This work presents a strategy for enhancing the mechanical performance of PCL as a biomaterial. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 112:692-699, 2009