This paper presents the characterization of in situ tri-polymer nanofibrillar composites (istp-NFCs) of polylactide (PLA)/thermoplastic polyurethane (TPU)/polytetrafluoroethylene (PTFE), which were fabricated using the in-situ generation of PTFE fibrils via melt blending with a twin-screw extruder (TSE). Nanofibrillated PTFE and its influence on ductility, crystallization, viscoelasticity and microcellular injection molding (MIM) of PLA/TPU blends were investigated. The immiscibility between PLA, TPU and PTFE were confirmed by scanning electron microscopy (SEM). The fibrillated PTFE in the PLA domain enhanced the distribution of dispersed spherical TPU particles. Significant enhancements in the crystallization behavior of PLA/TPU/PTFE were observed by differential scanning calorimetry (DSC), X-ray diffraction (XRD) and polarized optical microscopy (POM). Tensile and rheological results revealed that the ductility increased 20 times with a brittle–ductile transition, and the viscoelastic properties of PLA matrix were dramatically changed by TPU and fibrillated PTFE. The local surface nanomechanical property variation of the PLA/TPU blend was examined by peak force quantitative nanomechanics (PQNM) based on atomic force microscopy (AFM). The average elastic modulus and deformation at the PLA/TPU interface varied from 28.2 ± 1.1 GPa for PLA to 2.3 ± 0.2 GPa for TPU, and from 7.3 ± 0.5 nm for PLA to 61.3 ± 3.8 nm for TPU, respectively. Furthermore, the thickness of the interface between PLA and TPU was around 208.3 ± 14.8 nm. MIM experiments confirmed that the presence of PTFE fibrils dramatically improved the foamability behavior of PLA.