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In this study, a novel environment‐friendly PBST/PPC‐based blown film was prepared using maleic anhydride (MA) as a reactive compatibilizer to enhance the compatibility between poly(butylene succinate‐co‐terephthalate) (PBST) and poly(propylene carbonate) (PPC). Results of rheological testing and gel permeation chromatography (GPC) indicated that MA reacted with PBST/PPC during melt‐blending extrusion. Morphological analysis of the cryo‐fractured surfaces of PBST/PPC blend showed significantly improved compatibility between PBST and PPC with the addition of MA. Moreover, the Young's modulus, tensile strength, breaking strain, and tear strength of PBST/PPC/MA blown films increased with an increase in MA content. In comparison to PBST/MA blown film without PPC, the barrier property of PBST/PPC/MA blown films was improved. In addition, in vitro cell experiments showed that the PBST/PPC/MA blown film was suitable for the growth of mouse fibroblast (L929) cells. In vitro ecotoxicity testing on mung bean plant showed that the extracts from the PBST/PPC/MA blown film had no negative effects on the development of mung bean plant. Furthermore, degradability testing in soil also proved that the PBST/PPC/MA blown film had good biodegradability. Thus, the PBST/PPC/MA blown film can be used in fields, such as food packaging and agricultural mulch film. [ABSTRACT FROM AUTHOR]