It will be shown that when polyether-b-amide (PEBA) is added to a PLA/PA11 blend, it tends toward the interface and results in a significant increase in the impact strength when all three phases are fully percolated. The addition of the elastomeric PEBA phase to the binary PLA/PA11 blend replaces a rigid PLA/PA11 interface with a much more deformable one. The further addition of PEO to PLA results in an ultratough material with an impact strength of similar to 750 J/m, which is approximately 40 times greater than the original co-continuous PLA/PA11 blend. The tensile toughness and notched Izod impact strength are significantly influenced by the critical co-continuous composition region of the PLA/PA11 binary system and a minimum concentration to form a fully percolated PEBA layer at the co-continuous PLA/PA11 interface. The added PEO is also found to enhance the interfacial interactions and the chain mobility of PLA. The combined effects of co-continuity, strong interfacial interactions, a deformable interface, and sufficient PLA chain mobility are all essential to achieving ultratough behavior in PLA/PA11. Examination of the fracture surface of the ultratough material after impact indicates significant voiding. It is suggested that the stress-field overlap within the deformable PEBA phase in conjunction with suitable interfacial adhesion changes the failure mode from crazing to shear yielding. These results establish a strategy for the toughening of multiphase polymer blends, especially in the-vicinity of the co-continuous region.