Fully biobased, thermally remoldable, and highly tough blends were formulated from epoxidized soybean oil (ESO) and poly(lactic acid) (PLA) in a large-scale production via twin-screw extrusion and injection molding. During the melt-compounding of PLA and ESO, self-polymerization of ESO occurred in the presence of cationic initiator to form a polymerized ESO (PESO) rubbery phase within PLA matrix. The weight ratios of ESO to PLA ranging from 1:9 to 4:6 were designed to tailor the properties of the formed PESO/PLA blends such as crystallization behavior, rheological properties, mechanical properties, thermal stabilities, and morphologies. The PESO/PLA blends exhibited significantly increased elongation at break, tensile toughness, crystallinity, and complex viscosity when compared to pure PLA due to the formation of a two-phase separated structure in the blends; however, significant decreases in tensile strength, tensile modulus, storage modulus, and glass transition temperature of the blends were observed after the addition of ESO.