Polyhydroxyalkanoates (PHAs) comprise a group of natural biodegradable polyesters that are synthesized by microorganisms. However, several disadvantages limit their competition with traditional synthetic plastics or their application as ideal biomaterials. These disadvantages include their poor mechanical properties, high production cost, limited functionalities, incompatibility with conventional thermal processing techniques and susceptibility to thermal degradation. To circumvent these drawbacks, PHAs need to be modified to ensure improved performance in specific applications. In this review, well-established modification methods of PHAs are summarized and discussed. The improved properties of PHA that blends with natural raw materials or other biodegradable polymers, including starch, cellulose derivatives, lignin, poly(lactic acid), polycaprolactone and different PHA-type blends, are summarized. The functionalization of PHAs by chemical modification is described with respect to two important synthesis approaches: block copolymerization and graft copolymerization. The expanded utilization of the modified PHAs as engineering materials and the biomedical significance in different areas are also addressed.