Poly(lactic acid) (PLA) was toughened by the thermoplastic poly(propylene carbonate) polyurethane (PPCU), and the mechanical properties, crystallization behaviour and enzymatic degradation of the PLA/PPCU blends were investigated. The mechanical testing results showed that the impact strength and elongation at break of PLA/PPCU blends were remarkably higher than those of pure PLA. The impact strength was enhanced from 4.8 kJ m⁻² for pure PLA to 102.8 kJ m⁻² for the 50/50 PLA/PPCU blend. The impact testing showed obvious ductile fracture after PLA was blended with PPCU. It was found that the PLA matrix showed large plastic deformation (shear yielding) in the blend subjected to impact tests, which is an important energy-dissipation process and led to a toughened polymer blend. PPCU could act as an impact modifier for PLA. The maximum improvement in the cold crystallization temperature (T_cc) value was observed for PLA/PPCU blends where T_cc was increased from 113 °C to 128 °C. PPCU enhanced the crystallization degree of PLA, but the positive function of crystallization was weakened when the content of PPCU was increased from 10 to 50 wt%. Isothermal crystallization kinetics showed that PPCU improved the crystallinity of the PLA and reduced the crystallization rate of blends. And the incorporation of PPCU did not alter the crystal structure of the PLA matrix. The PLA/PPCU blends were high strength and high toughness, entirely biodegradable materials, which is important for manufacture and application.