This article concerns the utilization of maleated thermoplastic starch (MTPS) in the reactive extrusion melt-blending with poly(butylene adipate-co-terephthalate) (PBAT) in blown film applications. First, MTPS was prepared from cornstarch with glycerol (plasticizer) and malefic anhydride (MA; esterification agent). MTPS was then melt-blended with PBAT in a subsequent downstream extrusion operation. The effects of both polyester and MA contents were studied on the physicochemical parameters of melt-blends. For high polyester fractions (> 60 wt%), PBAT-g-MTPS graft copolymers were obtained through transesterification reactions. They were promoted by the MA-derived acidic moieties grafted onto the starch backbone as shown by selective Soxhlet extraction experiments and FTIR analyses. At lower polyester content, no significant reaction occurred more likely due to an inversion in the phase morphology between both components. Tensile properties of PBAT-g-MTPS graft copolymer containing 70 wt% polyester were much higher as the TPS/PBAT melt-blend modified with MA. This can be explained by a finer morphology of the dispersed phase in the continuous PBAT matrix, and an increased interfacial area for the grafting reaction as attested by morphological studies.