Being a bio-sourced and biodegradable polymer, polylactic acid (PLA) has been considered as one of the most promising substitutes for petroleum-based plastics. However, its wide application is greatly limited by its very poor ductility, which has driven PLA-toughening modifications to be a topic of increasing research interest in the past decade. Toughening enhancement is achieved often at the cost of a large sacrifice in strength, with the toughness–strength trade-off having remained as one of the main bottlenecks of PLA modification. In the present study, a bio-elastomeric material of epoxidized soybean oil (ESO) crosslinked with sebacic acid (SA) and enhanced by graphene oxide (GO) nanoparticles (NPs) was employed to toughen PLA with the purpose of simultaneously preserving strength and achieving additional functions. The even dispersion of GO NPs in ESO was aided by ultrasonication and guaranteed during the following ESO-SA crosslinking with GO participating in the carboxyl–epoxy reaction with both ESO and SA, resulting in a nanoparticle-enhanced and dynamically crosslinked elastomer (GESO) via a β-hydroxy ester. GESO was then melt-blended with PLA, with the interfacial reaction between ESO and PLA offering good compatibility. The blend morphology, and thermal and mechanical properties, etc., were evaluated and GESO was found to significantly toughen PLA while preserving its strength, with the GO loading optimized at ~0.67 wt%, which gave an elongation at break of ~274.5% and impact strength of ~10.2 kJ/m2, being 31 times and 2.5 times higher than pure PLA, respectively. Moreover, thanks to the presence of dynamic crosslinks and GO NPs, the PLA-GESO blends exhibited excellent shape memory effect and antistatic properties.