One novel thermoplastic starch is achieved by the grafting modification of furfuryl glycidyl ether (FGE). The FTIR and 1H-NMR analyses demonstrate that the furan rings are successfully grafted onto starch molecules through the bridging effect of maleic anhydride. XRD results show that the crystal structures of starch are effectively destroyed by the grafting modification of FGE, then endowing starch with excellent thermoplastic processing properties. In addition, the FGE-grafted starch (FGE-g-St) displays extremely excellent hydrophobicity, which is demonstrated that the contact angle is increased from about 30° for native starch (N-St) to about 65°. This results in the significantly improved interface compatibility between FGE-g-St and polylactide (PLA), reflected by the almost detectable phase interface in PLA/FGE-g-St composite. Compared with PLA/N-St composite, the tensile strength, flexural strength and elongation at break of PLA/FGE-g-St composite are increased comprehensively, which is attributed to the significantly improved interface compatibility.