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Poly (butylene adipate-co-terephthalate) (PBAT) is a fully biodegradable polymer with toughness and ductility. It is usually compounded with thermoplastic starch (TPS) to balance the cost for manufacturing biodegradable films such as disposable plastic bags. However, blending with TPS reduces valuable tensile strength, which limits the bearing capacity of PBAT film. In this study, microcrystalline cellulose (MCC) was employed as a reinforcement to strengthen the PBAT/TPS biodegradable film. The effect of MCC content on the mechanical, thermal, and morphological properties of the composite film were investigated. The optimal tensile strength and elongation at break reached 5.08 MPa and 230% when 4% MCC was added. The thermal stability and thermal resistance were improved with the addition of MCC; for example, Tmax increased by 1 °C and Tonset increased by 2–8 °C. Moreover, good compatibility among PBAT, TPS, and MCC can be achieved when the MCC content was below 6%. Consequently, the optimal MCC content was found to be 4%. These results could provide experimental data and method support for preparing high-performance PBAT hybrid films. [ABSTRACT FROM AUTHOR]