Biodegradable polylactide/modified polycaprolactone (PLA/mPCL) blends were successfully prepared by sustainable electron-induced reactive processing (EIReP) without introducing any chemical compatibilizers. The effects of EIReP modification and mPCL content on the properties of PLA/mPCL blends were comprehensively examined and analyzed. The dynamic rheology test showed that the complex viscosity and storage modulus of the EIReP-modified PLA/mPCL blends increased significantly, implying an improved melt strength and elasticity. The PLA crystallization was effectively affected by EIReP treatment, as evidenced by the reduced cold crystallization peak and remarkably enhanced crystallinity of the PLA phase. The crystallinity of PLA increased from 2.4 to 18.0% after EIReP treatment, and it further rose to 38.4% by introducing 10 wt % mPCL. Moreover, the isothermal crystallization rate increased by adding mPCL contents, and the blend with 5 wt % mPCL showed the lowest half crystallization time. It was found that the PLA thermal resistance investigated by dynamic mechanical analysis was effectively enhanced with the characteristics of higher modulus compared with nonmodified blends. The Charpy impact test revealed that the impact toughness of the EIReP-treated blends improved, implying a superior interfacial adhesion and chain interaction between the two polymer phases.