In this study, the compatibilization effects of triglycidylisobutyl polyhedral oligomeric silsesquioxane (TEpPOSS) on biodegradable poly(lactic acid) (PLA)/thermoplastic polyurethane (TPU) blends were investigated. All blends were prepared via melt blending and PLA/TPU (80/20, 70/30, 50/50 wt%) ratio was selected as the experimental parameter. In order to predict the selective localization of TEpPOSS thermodynamically, wetting coefficient were determined by means of surface energy measurements. Morphological analyses were carried out by scanning electron microscopy (SEM) and transmission electron microscopy (TEM). Moreover, rheological, mechanical, thermomechanical and thermal properties of the blends were performed via rheometer, universal tensile tester, dynamic mechanic analyses and differential scanning calorimeter (DSC), respectively. Morphological test results revealed that TEpPOSSs were mostly located at the interfaces of the PLA and TPU phases. According to the rheological studies, the interfacial interactions between PLA and TPU were improved with the addition of TEpPOSS, which resulted from the potential reactions between epoxy-carboxylic acid and/or epoxy-hydroxyl functional groups. The addition of TEpPOSS enhanced the mechanical properties of PLA/TPU blends. DSC test results revealed a decrease in the glass transition temperatures of PLA in the presence of TEpPOSS, which was an another indication of improved compatibility between PLA and TPU.