Novel injection molded biocomposites were engineered from switchgrass (Panicum virgatum L.) and a biodegradable matrix system. The chosen system was a pre-blend of poly(3-hydroxybutyrate-co-3-hydroxyvalerate) (PHBV) and poly(butylene adipate-co-terephthalate) (PBAT). Effect of incorporation of switchgrass fiber at loading levels of 20–40wt% was investigated. Experimental results of tensile modulus were correlated with theoretical modulus values. The hydrophobic–hydrophilic disparity between the matrix and fiber was solved by the addition of compatibilizer, poly diphenylmethane diisocyanate (pMDI). Loading levels of pMDI at 0.5, 0.75 and 1phr were investigated. Compatibilization chemistry at the interphase has been proposed as an attempt to understand the mechanism. Remarkable improvements in mechanical property were achieved with compatibilized composites compared to the virgin composites of PHBV/PBAT/switchgrass. PHBV/PBAT matrix with 30wt% switchgrass compatibilized by 0.75phr pMDI resulted in the highest tensile properties and heat deflection temperature. Fracture surface morphology has been investigated through scanning electron microscopy (SEM) and indicated enhanced fiber–matrix adhesion in case of compatibilized composites.