Addition of a small amount of PHA to PLA markedly improves the toughness of the resultant blend. PLA-PHA blend films comprising 90 weight percent PLA and 10 weight percent PHA were extruded using a single screw extruder. Dynamic mechanical analysis of these films revealed these blends to be partially miscible. PLA-PHA blend films are hydrophobic which limits their use in many consumer and biomedical applications. PLA-PHA blend films were surface modified using a two-step photografting approach, where in step 1, benzophenone was photografted to the film surface and in step 2, hydrophilic monomers like acrylamide and acrylic acid were photopolymerized from the film surface. The surface modified films were characterized using water contact angle goniometry, ATR-FTIR spectroscopy, and mechanical testing. It was observed that PLA-PHA blend films underwent physical aging, significantly affecting the toughness. Physically aged films regained original toughness on annealing at 60 °C for 30 min. Another aim of this research was to study the effect of surface modification on bulk properties of PLA-PHA blend films. All films were annealed at 60 °C for 30 min. before mechanical testing in order to make sure that there was no contribution to the change in mechanical properties from physical aging. The degree of crystallinity of neat and surface modified films was calculated using wide angle X-ray diffraction (WAXD) technique. Surface modified blend films lost their toughness on surface modification and this was attributed to UV-assisted solvent induced crystallization.