Rubber toughening of poly(lactic acid), PLA, particularly with biobased natural rubber (NR) to address its inherent brittleness, is always at the cost of reducing stiffness and tensile strength. In this work, reactive core−shell particles (RCS particles) of NR with occluded rigid polystyrene (PS) nanodomains inside the NR particles and surface-grafted glycidyl methacrylatemethyl methacrylate copolymer (GMA-co-MMA) were designed and successfully synthesized via a two-step seeded emulsion polymerization technique to balance the stiffness and toughness of the PLA/NR blends. Incorporation of RCS particles resulted in a significant improvement in the impact toughness of PLA. The maximum impact strength of 365 J/m (28-fold increment relative to PLA) was achieved for the PLA/RCS 80/20 blend, while the tensile strength preserved 86% and decrement in Young's modulus was less than 20%, representative of a notable "stiff ness−toughness balance" in these systems. This substantial increase in impact toughness was ascribed to the high level of interfacial adhesion between the RCS particles and PLA matrix and consequently activation of different toughening micromechanisms, particularly massive shear yielding in the entire PLA matrix. On the other hand, both the retained tensile strength and elastic modulus were attributed to the inclusion of rigid PS nanodomains within the NR particles. This innovative strategy, which effectively achieves a balance between stiffness and toughness in high-performance biodegradable plastics based on PLA, represents a significant advancement in the production of alternatives to engineering plastics, especially for use in automotive applications.