In contrast to most studies in the literature where soy protein was used as a particulate filler in hydrophobic thermoplastic polymers, in this study, soy protein concentrate (SPC) was processed as a plastic to blend with poly(butylene adipate-co-terephthalate) (PBAT). By adjusting water content in the formulated SPC from low to high prior to compounding, SPC exhibited behaviors ranging from rigid filler to deformable filler to plastic during blending. Detailed phase morphology of the blends was revealed by transmission electron microscopy and field emission scanning electron microscopy. Evidences showed that SPC formed percolated thread structures when additional water was added to SPC prior to compounding. Study of dynamic theology also confirmed the formation of interconnected network structure. Accordingly, tensile mechanical properties were greatly improved for those blends with percolated SPC thread structures. The molecular weight change of PBAT in blends and influence of processing on soy protein solubility were also examined. (C) 2009 Elsevier Ltd. All rights reserved.