The interfacial compatibilization and dispersion of carbon nanotubes (CNTs) in incompatible poly(lactic acid)/poly(butylene terephthalate adipate) (PLA/PBAT) composites are key points for evaluating the performance of the composites. To address this, a novel compatibilizer, sulfonate imidazolium polyurethane (IPU) containing PLA and poly(1,4-butylene adipate) segments modified CNTs, employed in conjunction with multi-component epoxy chain extender (ADR) to toughen synergistically PLA/PBAT composites. The thermal stability, rheological behavior, morphology, and mechanical properties of PLA/PBAT composites were performed by TGA, DSC, dynamic rheometer, SEM, tensile, and notched Izod impact measure. Moreover, the elongation at break and notched Izod impact strength of PLA5/PBAT5/4C/0.4I composites achieved 341 % and 61.8 kJ/m respectively, whose tensile strength was 33.7 MPa. The interfacial compatibilization and adhesion were enhanced because of the interface reaction catalyzed by IPU and the refined co-continuous phase structure. The CNTs non-covalently modified by IPU that bridged at the PBAT phase and interface transferred the stress into the matrix, prevented the development of microcracks, and absorbed impact fracture energy in the form of pull-out of the matrix, inducing shear yielding and plastic deformation. This new type of compatibilizer with modified CNTs is of great significance for realizing the high performance of PLA/PBAT composites.Copyright © 2023. Published by Elsevier B.V.