Polylactic acid (PLA) has a long history in medical applications. Reinforced PLA has the potential to be used in the medical applications that require high mechanical strength such as coronary stents and bone fixation devices. Halloysite nanotube (HNT) has received considerable attention recently due to its tubular structure, high aspect ratio, high mechanical strength, thermal stability, biocompatibility and sustained drug releasing properties. Halloysite has been investigated in compounding with many polymers. However, the research in compounding halloysite with biodegradable materials for use in biological applications is sparse. In this study various weight fractions of HNT was compounded with the biodegradable polymer PLA using a melt compounding method. Tensile test, Fourier infrared spectroscopy (FTIR), differential scanning calorimetry (DSC), contact angle test, scanning electron microscopy (SEM), void content and thermogravimetric analysis (TGA) were carried out to study the PLA/HNT composite. Tensile test results indicated that Young's modulus and stiffness of PLA were enhanced with the addition of HNT; FTIR spectra showed the interaction between the PLA and HNT; whereas contact angle measurements indicated that the wettability of the PLA/HNT composite was not affected by the addition of HNT. However, the thermal stability of PLA was adversely effected by the addition of HNT which may be related to the presence of voids between the polymer and matrix. Nevertheless, the reinforced PLA/HNT composite, which maintains the surface characteristics, may prove beneficial for use in biological applications. POLYM. COMPOS., 38:2166–2173, 2017. © 2015 Society of Plastics Engineers