The increasing use of petrochemical based non-degradable polymers negatively affects the ecology due to the huge accumulation of solid wastes disposed to environment. One of the sustainable solutions of this problem is the use of biodegradable polymers. Recently, poly(lactic acid) (PLA) has attracted attention because of its industrial scale production with a reasonably comparable price to other petroleum-based polymers. Although PLA is relatively high strength and high modulus analogous to polystyrene, its inherent brittleness and low toughness due to the low entanglement density and the high value of characteristic ratio representing the chain stiffness restrict its application. Elastomeric thermoplastic polyurethanes (TPUs) can be used to toughen PLA; since the soft segment of a TPU is mainly polyester it is expected to have a good compatibility with PLA. Polyhedral oligomeric silsesquioxanes (POSS) are useful candidates for reinforcement of polymers. The incorporation of POSS containing reactive groups into a polymer matrix creates a possible nanoscale reinforcement, in which POSS molecules may link to polymer chains covalently. In this study, the influence of POSS loading level and type of its functional group on the mechanical, thermal, rheological properties of PLA-TPU blends were investigated. PLA-TPU-POSS blends were prepared by melt compounding process using an Xplore Instruments laboratory compounder. Thermal, mechanical, rheological and morphological properties were characterized. Keywords: polylactide, thermoplastic polyurethane, blends, POSS Acknowledgement: This study is financially supported by TUBITAK (Grant Number:115M576)