Biodegradable polymers are desirable for a variety of applications, such as in packaging, agriculture, and medicine. Polyethylene (PE) blended with starch is already found to be a potential candidate to replace nondegradable thermoplastics in the areas of packaging. Films of polyethylene (PE)-starch blends with and without vegetable oil as a compatibilizer were prepared. The degradation of the films under thermooxidative treatment, ultraviolet light exposure, high temperature, high humidity, and natural ambience (soil burial) were monitored. It is seen that vegetable oil as an additive has a dual role : as a plasticizer, it improves the film quality; as a prooxidant, it accelerates degradation of the film.