Plastics have been used widely for packaging material. However, plastic wastes can pollute environment because of its persistency to be biodegraded by microorganism. Efforts have been conducted to develop environmental friendly plastic from renewable resources. Problems encountered in the manufacture of biodegradable plastic are poor physical-mechanical properties and incompatibility between hydrophilic/polar and hydrophobic/non-polar materials. The modification of raw materials and use of compatibilizer were applied to improve the compatibility between two material blends. The purpose of this study was to design a process of making biodegradable plastic by modifing the raw material and the use of compatibilizer. This study consisted of three steps, namely preparation of thermoplastic starch, preparation of compatibilizer MA-g-LLDPE/HDPE and manufacturing process of biodegradable plastic. The plastic properties observed included morphological structure, melt flow rate, density, thermal, mechanical, and barrier properties. The results showed that increasing thermoplastic starch content decreased melt flow rate, mechanical, oxygen transmition rate properties and increased water vapor transmition rate. The presence of MA-g-LLDPE/HDPE compatibilizer resulted in better physical and mechanical properties of biodegradable plastic.