Abstract Composites of a biodegradable thermoplastic aliphatic polyester, polybutylene succinate (PBS), with bentonite were investigated for morphological and mechanical properties. The bentonite was modified with soybean oil (SBO) and lard oil (LO) (2:98 clay:oil % by weight) by mechanical stirring and ultrasonication. The PBS/modified bentonite composite was prepared by using an internal mixer and processed by compression molding. Under bentonite modification conditions, XRD and SEM showed that the bentonite layers were broken into small layers, and the d-spacing between the layers was increased by edible oil molecules. A small plate like structure of modified bentonite composite was observed by SEM micrograph, which revealed short and long layer silicate structure non-directionally throughout the matrix phase. The mechanical properties of PBS were reinforced by this structure. The tensile modulus and elongation at break seem to depend on its directional bentonite. Interestingly, considerable improvement in impact strength was observed at over 2 wt% of clay. The impact strengths of PBS, PBS/modified BTN with SBO composite, and PBS/modified BTN with LO composite were increased from 1 to 1.5 and 2 kJ/m2, respectively. Comparatively, using LO modified bentonite had a better performance for increased interlayer and resulted in higher impact strength of the composite than that of SBO composite. The results demonstrated that PBS/modified bentonite using edible oil could be a potential alternative low cost, eco-friendly material with superior impact properties useful for further applications.