In this study, soy protein concentrate (SPC) was blended as plastic with poly(butylene adipate-co-terephthalate) (PBAT). An extra amount of water was added to SPC prior to compounding to ensure that SPC behaved like a plastic during mixing. Because of the extensive crosslinking and agglomeration during compounding and the fact that most water was evaporated after drying the compounds, the SPC phase was not able to flow like a plastic in the subsequent processing. Therefore, the compounds became in-situ formed composites. The effects of SPC content and compatibilizer on the morphological, rheological, tensile and dynamic mechanical properties of PBAT/SPC blends were studied. Using maleic anhydride grafted PBAT as compatibilizer resulted in fine domain sizes and good dispersion of SPC and hence improved tensile and dynamic mechanical properties. In the presence of compatiblizer, the formation of percolated SPC network structure was observed at high SPC concentrations, subsequently, resulted in drastic changes in theological properties, mechanical and dynamic mechanical properties of the blends. (C) 2010 Elsevier Ltd. All rights reserved.