Recently, the biodegradable polymers have created a new trend in using polymer blends unlike individual biopolymer as matrix for composite applications. Because the polymer blending is one of the most important way to achieve desired properties, which are absent in the neat polymers. The balance of stiffness, toughness and flow properties of the blends are highly demanded for the biocomposites matrix. With this objective, the current study discusses the biodegradable poly (butylene succinate) (PBS) and poly (butylene adipate-co-terephthalate) (PBAT) binary blends were melt compounded. The melt compounded biodegradable PBS/PBAT blends showed synergistic effect in the mechanical properties, particularly in tensile strength and percentage elongation. The significant improvement in mechanical properties was attributed to the transesterification reaction between the PBS and PBAT. The occurred transesterification reaction during melt blending is due to the exiting residual catalyst in the neat polymers and thus acts as a compatibilizer between the two phases. The transesterification reaction was confirmed by Fourier transform infrared spectroscopy (FTIR) analysis. The phase morphology, spherulite morphology, and rheological properties were also correlated with compatibility between the PBS and PBAT in the blends. Keywords: Binary blends, Transesterification, Mechanical properties, Rheological properties Acknowledgements The authors acknowledge the Ontario Ministry of Agriculture and Food (OMAF) and Ministry of Rural Affairs (MRA) – University of Guelph Bioeconomy-industrial uses research for the financial support to carry out this research work.