Poly(ethylene-co-vinyl acetate) (EVA) powders containing 10 and 20 wt % of vinyl acetate (VAc) units was saponified in ethanol/KOH solution in a heterogeneous manner. Intermolecular interaction between vinyl alcohol(VOH) units in the produced poly(ethylene-co-vinyl alcohol) (EVOH) promoted the crystallization of intervening segments composed of ethylene units. Ring opening polymerization of caprolactone (CL) in the presence of EVOH gave EVOH-g-PCL graft copolymers with relatively short chain branches. Even though the graft copolymerization was carried out in a homogeneous solution, all the VOH units were not equally reactive for the PCL grafting. And the unreacted VOH units decreased very slowly with the graft copolymerization time. EVOH-g-PCL decreased the domain size of the dispersed phase in low density polyethylene (PE)/biodegradable master batch (MB) blends, and thus increased their tensile properties significantly.