In this study binary and ternary blends of polylactide (PLA), polycaprolactone (PCL) and thermoplastic starch (TPS) are prepared using a one-step extrusion process and the morphology, rheology and physical properties are examined. The morphology and quantitative image analysis of the 50/50 PLA/TPS blend transverse phase size demonstrate a bimodal distribution and the addition of PCL to form a ternary blend results in a substantial number of fine dispersed particles present in the system. Focused ion beam irradiation, followed by atomic force microscopy (AFM) shows that dispersed PCL forms particles with a size of 370 nm in PLA. The TPS phase in the ternary blends shows some low level coalescence after a subsequent shaping operation. Dynamic mechanical analysis indicates that the temperature of the tan 6 peak for the PLA is independent of TPS blend composition and that the addition of PCL in the ternary blend has little influence on the blend transitions. Both the a and 0 transitions for the thermoplastic starch are highly sensitive to glycerol content. When TPS of high glycerol content is blended with PLA, an increase in the ductility of the samples is achieved and this effect increases with increasing volume fraction of TPS. The ternary blend results in an even greater ductility with an elongation at break of 55% as compared to 5% for the pure PLA. A substantial increase in the notched Izod impact energy is also observed with some blends demonstrating three times the impact energy of pure PLA. The mechanical properties for the ternary blend clearly indicate a synergistic effect that exceeds the results obtained for any of the binary pairs. Overall, the ternary blend approach with PLA/TPS/PCL is an interesting technique to expand the property range of PLA materials. (c) 2007 Elsevier Ltd. All rights reserved.