Creating biobased polymer blends with outstanding properties, nanoscale morphology, shape-memory capability, and biocompatibility is very crucial and requires a fundamental understanding of the phase behavior, macromolecular structure, and biological compatibility of the polymer blends with living cells. It is very critical to understand the complex relationships among the polymer structure, morphology, and performance of multifunctional smart materials under conditions that they are likely to encounter during use, particularly in biomedical applications. Biobased semi-interpenetrating polymer networks of poly(ε-caprolactone) and epoxidized soybean oil with nanoscale morphology have been successfully synthesized via in situ cationic polymerization and compatibilization in a homogeneous solution. Varies analytical and characterization techniques, such as Fourier transform infrared spectroscopy, differential scanning calorimetry, dynamic mechanical analysis, transmission electron microscopy, Xray scattering, cell toxicity, and shape-memory effects (SMEs), have been employed to understand the structure−properties relationship of these smart, biobased nanostructured polymer blends. The synthesized nano blends were nontoxic or biocompatible and supported attachment of human vein endothelial cells, showing their potential use in biomedical applications. The current versatile, low-cost strategy for synthesizing the nanoscale morphology of semi-interpenetrating polymer networks with SMEs and biocompatibility should be widely applicable for polymer systems. This study is also considered as a continuation to our efforts in the area of biobased polymers to develop innovative technologies to transform natural resources into smart multifunctional materials for a wide range of applications, including coatings, adhesives, and medical devices.