The brittle behavior of poly(lactic acid) (PLA) and PLA composites with inorganic filler limits their applications; the addition of a toughening agent, such as a rubbery phase, was selected to transform the brittle to ductile behavior for versatility in various applications. This work aims to study the properties of PLA and PLA composite with filled nanosized hydroxyapatite (nHA) after adding modified natural rubber (MoNR), which acts as a toughening agent. MoNR refers to poly(acrylic acid-co-acrylamide)-grafted deproteinized natural rubber. nHA was prepared from fish scales. Its characteristics were investigated and was confirmed to be comparable to those of commercial grade. PLA-MoNR at various MoNR contents and PLA/nHA composites with/without MoNR were prepared by melt mixing. Their morphology, mechanical, and thermal properties were observed and investigated. Samples with MoNR added showed the dispersion of spherical particles, indicating incompatibility. However, the mechanical properties of PLA-MoNR, which had MoNR added at 10 phr, showed toughening behavior (increased impact strength by more than two times compared to that of neat PLA). The PLA/nHA composite with MoNR showed the same result. The addition of MoNR in the composite increased its impact strength by 1.27 times compared to the composite without MoNR. MoNR can be a stress concentrator, resulting in toughened PLA and PLA/nHA composite.