Cellulose nanocrystals (CNC) were successfully grafted with a low molecular weight poly(butylene glutarate) through an in situ polymerization procedure. The grafting treatment decreased the CNC hydrophilic character and increased the onset of their thermal degradation by approximately 20°C, thus increasing the possibilities of CNC application. Composites of grafted and nongrafted CNC with a poly(butylene-adipate-co-terephthalate) (PBAT) matrix were prepared by melt extrusion. The CNC addition led to an increase of 50% of the tensile elastic modulus of the PBAT. In addition, dynamic mechanical thermal analysis showed that the composite with CNC retained its high modulus even at temperatures far above the glass transition temperature of PBAT. At 60°C the storage modulus of the composite with CNC was approximately 200% higher than that of the pure PBAT. Thus, in this work, nanocomposites of improved properties were obtained through a combination of in situ polymerization and melt extrusion.