Abstract: A series of poly(lactic acid) (PLA)/polyurethane (PU) blends were prepared by in-situ reaction of PLA with poly(tetramethylene ether glycol) (PTMG) and carbodiimide-modified MDI (L-MDI). The reaction principle, mechanical properties, fracture morphology, dynamic rheological properties and crystalline properties of the resulting blends were investigated. The results indicated that micro-crosslinked polyurethane was formed during the in-situ reaction process along with the chain extension and branching of PLA. The mechanical results demonstrated that the toughness of PLA/PU blends was significantly enhanced, and their elongation at break, tensile toughness and notch impact strength were improved by 230 %, 134.13 MJ/m3 and 34.19 kJ/m2, respectively, compared to pure PLA, when 30 wt% of PU was incorporated. The toughening mechanism may be due to the crazes and shear zones induced by PU rubbery phase in the matrix. The rheological results indicated that the melts of pure PLA and its blends with PLA were pseudoplastic fluid, and however, the blends had a higher storage modulus and complex viscosity. The crystallization test suggested that the PLA/PU blends had a higher crystallization rate and more perfect level of crystallization in comparison with pure PLA.