In order to improve the miscibility and mechanical properties of poly(L-lactic acid) (PLLA) and poly(3-hydroxybutyrate-co-3-hydroxyvalerate) (PHBV) bio-alloy, small amount of transesterification catalyst, zinc acetate was added in the melt blending process. We show that the PLLA-PHBV copolymer generated during the melt blending significantly improves the miscibility and therefore enhances the mechanical properties of the product. Dynamic mechanical analysis (DMA), scanning electron microscopy (SEM), and tensile tests were performed to study the miscibility and mechanical properties of the blends. Fourier transform infrared spectroscopy (FTIR) and gel permeation chromatography (GPC) were used to reveal the molecular structural, and molecular weight changes of PLLA and PHBV after melt mixing with zinc acetate. SEM and FTIR results have clearly shown that the PLLA-PHBV copolymer generated from transesterification reaction acted as a compatibilizer and therefore resulted in an improved interfacial miscibility and ductility of PLLA/PHBV blend. In our mechanistic study, a competition between the PLLA/PHBV transesterification reaction and the thermal decomposition of PHBV was identified for the first time. On the basis of these observations, a new mechanism of transesterification reaction was proposed. (C) 2015 Elsevier Ltd. All rights reserved.