Polylactic acid (PLA) was reinforced with either bamboo or jute fabric to produce 30 wt% composites. However, hydrophobic PLA and hydrophilic natural fiber are incompatible. Hence, maleic anhydride grafted PLA (PLA-g-MA) used as compatibilizer. In this study, effect of grafting reactants content, maleic anhydride (MA) and dicumyl peroxide (DCP) on MA grafting degree of PLA-g-MA were optimized using Taguchi experimental design. Synthesized PLA-g-MA exhibiting highest MA grafting degree used as compatibilizer at 3 wt%, 5 wt%, and 10 wt% for 30 wt% composites. These compatibilized 30 wt% composites were investigated for their water absorption, thermal stability, thermal, mechanical, and dynamic mechanical properties. PLA-g-MA addition at 3 wt% onto 30 wt% bamboo/PLA or at 5 wt% onto 30 wt% jute/PLA enhanced their interfacial adhesion, increasing their T-g, T-m, X-c, tensile, flexural, impact and storage modulus but reduced their water absorption, T-cc and damping factor. Further PLA-g-MA addition above 3 wt% onto 30 wt% bamboo/PLA or above 5 wt% onto 30 wt% jute/PLA adversely affected their water absorption, thermal, mechanical and dynamic mechanical properties. This was attributed to excess uncoupled PLA-g-MA acting as plasticizer. Adverse effects also observed for their thermal stability when PLA-g-MA was added onto 30 wt% bamboo/PLA or 30 wt% jute/PLA. This was attributed to higher grafting reactant content, MA and less thermally stable PLA-g-MA.