Xylan extracted from rapeseed straw was chemically modified to gain hydrophobic and thermoplastic properties via macroinitiator formation followed by a free radical grafting-from polymerization with octadecyl acrylate. Biocomposites were then prepared by incorporation of 5 or 20% (w/w) rapeseed straw xylan into a poly(ε-caprolactone) (PCL) matrix by melt extrusion. The grafted xylan was homogeneously distributed within the biocomposite and reinforced the PCL matrix while at the same time preserving the ability to elongate to tensile strains >500%. Analogous biocomposites made from unmodified xylan in a PCL matrix resulted in heterogeneous mixtures and brittle tensile properties.