Multi-Walled Carbon Nanotubes (MWCNTs) were modified with epoxy and aminosilane diethanolamine (DEA), and nanocomposites of poly(butylene adipate-co-terephthalate) (PBAT) and the modified MWCNTs were prepared with the aim of improving the physical properties of biodegradable PBAT. The physical and the thermal properties of the PBAT/MWCNT nanocomposites were investigated using various techniques. Fourier transform infrared spectroscopy measurements revealed that the MWCNTs were efficiently modified with DEA. Scanning electron micrographs of the nanocomposites indicated that the modified MWCNTs were dispersed homogeneously in PBAT. The thermal stability of the nanocomposite decreased with increase in the content of epoxy-MWCNT-DEA due to the poor thermal stabilities of epoxy and amino silane DEA. However, the surface hydrophobicity of the nanocomposite increased. The highest stress (170% of PBAT) was observed when the content of epoxy-MWCNT-DEA in the nanocomposite was 2 wt%.