Polylactide (PLA) is an important biodegradable polymer, used for numerous applications ranging from industrial packaging to tissue engineering. However, its inherent brittleness and limited thermal stability have restricted its penetration to niche markets. In this communication, the authors demonstrate that blending of PLA with castor oil-based polyurethane prepolymer (COPUP), with the addition of COPUP, dispersed in the PLA matrix can overcome the inherent brittleness of the matrix polymer. NCO-terminated COPUP was successfully synthesized and subsequently mixed with variable concentration of PLA matrix using melt blending technique. The interfacial compatibilization between COPUP and PLA phase happened by the reaction of -NCO groups with terminal hydroxyl groups of PLA was confirmed by FT-IR peak deconvolution technique. As indicated by the results of DMA and DSC, the glass transition temperature (T (g)) of both PLA and COPUP shifted closer together, indicating that the blend compatibility increased. The tensile properties and notched Izod impact strength of the PLA and toughened PLA are also investigated. With the addition of 30 % COPUP concentration, the elongation at break of the blend reached 377.46 %, and a notched Izod impact 269.62 J m(-1). With improved toughness, the PLA/COPUP blends could be used as replacements for some traditional petroleum-based polymers.