We first review recent flame retardant formulations on biodegradable polymer blends, such as either starch/poly(butylene adipate-co-terephthalate) (PBAT) or poly(lactic acid)/poly(butylene adipate-co-terephthalate) (PLA/PBAT), where interfacial tensions of the biodegradable polymer blends can play an important role on mechanical and flame retardant properties. The improved material properties are also mainly influenced by morphology of the blends. In addition, a novel approach to increase not only compatibility but also flame retardancy of the biodegradable polymer blends is reviewed. In this method, an aryl phosphate flame retardant, resorcinol di(phenyl phosphate) (RDP), is adsorbed onto the added particles. This is shown to have the following advantages; (a) it can act as a surfactant on either starch or clays, leading to better dispersion in the polymer matrices, (b) enhance compatibilization of PLA and ECOFLEX by localizing the particles at the blend interfaces, and (c) segregated to the blend surface when heated, and reacted with both polymer and starch. These factors allowed for the formulation of self-extinguishing PLA/ECOFLEX blends, with unusual properties that distinguished them from other blends using standard flame retardant halogen formulations. The reactive properties allowed the formation of a shell like layer whose modulus was much higher than the interior polymer, and which dissipated the heat of the approaching front. Analysis of the chars formed after combustion in a cone calorimeter, indicated that addition of the RDP soaked clays did not affect the ductility of the chars or their ability to encase the combustion products which sustained internal pressures from the decomposition gases allowing the release at a steady rate.