Abstract. Epoxidized Soybean Oil (ESO) have been used as the compatilizer in the Poly (butylene succinate)/lignin (PBS/lignin) composites. Compatibilized composites were fabricated by a novel vane extruder (VE) which can generate global and dynamic elongational flow. The effects of ESO on the mechanical, rheological properties and morphology of PBS/lignin were studied. The results indicated that the use of ESO had plasticizing effect on the matrix PBS while the addition reduced tensile strength. From SEM micrographs it could be clearly observed that there was a better interfacial adhesion between lignin and matrix. Meanwhile, rheological tests showed the incorporation of ESO improved its Newtonian behavior and can enhance PBS’s flexibility. Keywords: Epoxidized Soybean Oil ; Poly (butylene succinate) , Lignin, Composite’s Properties