Polylactic acid (PLA) was modified with poly (butylene adipate-co-terephthalate) (PBAT) and carbon nanotubes (CNTs-COOH) with carboxyl groups by using the melt blending technique. Ethylene-butyl acrylate-glycidyl methacrylate (E-BA-GMA) was used as a compatibilizer which can bond the CNTs-COOH nanoparticles with PLA/PBAT matrix through interaction between the epoxy and carboxyl groups. The effects of the CNTs-COOH content on the mechanical properties, thermal properties, crystallinity and morphology of PLA/CNTs-COOH nanocomposites were investigated. The results showed that the tensile strength, elongation at break and impact strength of PLA could be simultaneously increased by incorporating CNTs-COOH nanoparticles. PLA/CNTs-COOH nanocomposites possessed higher thermal stability than pure PLA. The glass transition temperature and initial degradation temperature of PLA/CNTs-COOH increased as the CNTs-COOH content increased. When the CNTs-COOH content was low (≤0.5 wt%), CNTs-COOH nanoparticles could uniformly disperse in the PLA matrix. In general, CNTs-COOH was an effective filler to reinforce and toughen PLA simultaneously, and the PLA/CNTs-COOH nanocomposite with 0.5 wt% CNTs-COOH exhibited a good combination of strength and toughness.