AbstractIncorporating graphene oxide (GO) with controlled localization into poly(butylene adipate‐co‐terephthalate) (PBAT) blends with poly(ethylene vinyl alcohol) (EVOH) aimed to improve barrier properties, biodegradability, and mechanical strength of PBAT. The PBAT/EVOH/GO nanocomposites containing 0 to 1 wt% of GO were prepared by a reactive mixing process in internal mixer. Microscopic images confirmed that the GO nanoplatelets are mainly localized in PBAT phase and then at the interface, contrary to the thermodynamic affinity of GO toward EVOH. The reactive nature of PBAT/EVOH/GO nanocomposites was confirmed via time‐sweep rheological studies where specific changes were observed in melt viscosity over time. The results of microscopic studies, rheometry, tensile test, and dynamic mechanical thermal analysis (DMTA) confirmed that localizing GO at the interface establishes strong interactions between PBAT and EVOH. By the addition of 0.75 wt% GO, tensile and yield strength were improved by 19% and 45%, respectively. Increasing GO significantly increased the hydrolysis degradation rate of the nanocomposites. Furthermore, the addition of GO considerably decreased the oxygen and water vapor permeability of the blends by up to 40% at 1 wt% GO.