Due to the hydrophobic nature of poly (butylene terephthalate) (PBAT), and the hydrophilic nature of bamboo flour (BF), a BF/PBAT (50/50) blend shows low mechanical properties, and especially shows poor impact strength. In order to increase the interfacial adhesion between BF and PBAT, diisocyanate was used as a reactive compatibilizer to modify bamboo powder. A series of BF/PBAT composites were prepared by the method of mixing and melting in an internal mixer. After adding reactive compatibilizer 4,4 -methylenebis(phenyl isocyanate) (MDI), BF/PBAT (50/50) composites with high mechanical properties were successfully prepared. The tensile strength, elongation at break, and impact strength of the BF/MDI-2/PBAT composite with 2 wt % MDI content were increased by 1.9, 6.8, and 4.3 times respectively over the BF/PBAT blend without the added MDI. The higher toughening effect of MDI in BF/PBAT composites can be mainly ascribed to the improved interface bonding between BF and PBAT. The isocyanate group of MDI can react with the hydroxyl group on the BF surface and in situ formation of the carbamate group on the BF surface. The residual isocyanate can then react with the hydroxyl group of PBAT and form carbamate groups. The rheological behaviors demonstrate that addition of appropriate amounts of MDI, 1 wt % and 2 wt %, can promote the flowability of the molten BF/PBAT composites due to the decrease in interparticle interaction between bamboo powder and the increase in the thermal motion of the molecules.Bamboo fiber is composed of cellulose, lignin, hemicellulose, and other macromolecules, which have strong rigidity. In addition, it has the advantages of antibacterial, low cost, and high recovery rate. More significantly, bamboo flour can not only be used as a reinforcement, but also can act as a nucleation agent to improve the crystallization performance and crystallization rate of the composite [3,7-9].