A hydrophilic copolymer, ethylene-vinyl alcohol (EVOH), was incorporated into the poly(lactic acid) (PLA) matrix to improve the barrier property of PLA through twin-screw extrusion rather than the typical coextrusion process. A chain extender, poly[(ethylene)-co-(methyl acrylate)-co-(glycidyl methacrylate)] (PEMG), was used to reduce the probability of the thermal degradation of PLA during melt compounding. Biaxial stretching was used to enhance the microstructure and barrier property of PLA-PEMG/EVOH films. Experimentally, PEMG considerably reduced the probability of the thermal degradation of the PLA-PEMG sample. Biaxial stretching increased the tensile strength and decreased the value of elongation at break of the PLA-PEMG/EVOH80 (PLA/EVOH 100/80) film. Because of the efficient blending of PLA/EVOH in the twin-screw extruder, the dispersion of EVOH in the PLA matrix revealed homogeneous dispersion with a domain size of 1-5 mu m. EVOH effectively improved the water vapour transmission rate (WVTR) of PLA through melt blending. Blending PLA-PEMG with EVOH substantially decreased the WVTR from 250 cc-20 mu m/m(2)-day-atm for neat PLA to approximately 65 cc-20 mu m/m(2)-day-atm for the PLA-PEMG/EVOH80 film, a decrease of approximately 74 % compared with neat PLA. Moreover, the WVTR decreased further from 65 cc-20 mu m/m(2)-day-atm for the unstretched PLA-PEMG/EVOH80 film to 6.3 cc-20 mu m/m(2)-day-atm for the film stretched at a stretch ratio of 3.5 x 3.5 and at 100 %/s, a decrease of approximately 90 % compared with neat PLA.