In the last decade, the usage of plastics parallel to the modernization has increased in daily life. This increase of using plastics causes solid waste problems. Therefor many researches have focused on biodegradable polymers. In this study, the biodegradable blends of thermoplastic starch (TPS) and poly(butlylene adipate-co-terephtalate) (PBAT) were prepared in the presence of a styrene-acrylic multi-epoxy functional compatibilizer and oxidized thermoplastic starch (OTPS) using one-step melt-compounding process. The need for OTPS is to arrange the flow properties of starch phase and to balance the hydrophilicity. The compatibilizer is used to enhance the interfacial properties and the phase dimensions. The OTPS/PBAT ratio and the compatibilizer ratio were selected as material parameters. The OTPS/PBAT blends were characterized by performing tensile, impact tests; differential scanning calorimeter (DSC) and scanning electron microscopy (SEM). The physicochemical properties such as mechanical strength, glass transition and melting temperatures were investigated. The fracture morphology was studied by means of scanning electron microscopy (SEM). The rheological behaviour was investigated by means of oscillatory rotational rheometry. It was observed that the multi-epoxide compatibilizer improved the mechanical and rheological properties of the blends. The morphological investigations supported these findings. Keywords: thermoplastic starch, poly(butlylene adipate-co-terephtalate), compatibilization, blending