Cellulose nanocrystal (CNCs)‐reinforced poly(lactic acid) (PLA) nanocomposites were prepared using twin screw extrusion followed by injection molding. Masterbatch approach was used to achieve more efficient dispersion of CNCs in PLA matrix. Modified CNCs (b‐CNCs) were prepared using benzoic acid as a nontoxic material through a green esterification method in a solvent‐free technique. Transmission electron microscopy images did not exhibit significant differences in the structure of b‐CNCs as compared with unmodified CNCs. However, a reduction of 6.6–15.5% in the aspect ratio of b‐CNCs was observed. The fracture surface of PLA‐b‐CNCs nanocomposites exhibited rough and irregular pattern which confirmed the need of more energy for fracture. Pristine CNCs showed a decrease in the thermal stability of nanocomposites, however, b‐CNCs nanocomposites exhibited higher thermal stability than pure PLA. The average storage modulus was improved by 38 and 48% by addition of CNCs and b‐CNCs in PLA, respectively. The incorporation of b‐CNCs increased Young's modulus, ultimate tensile stress, elongation at break, and impact strength by 27.02, 10.90, 4.20, and 32.77%, respectively, however, CNCs nanocomposites exhibited a slight decrease in ultimate strength and elongation at break. © 2018 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2018, 135, 46468.