In this work, the oil palm empty fruit bunch (EFB) fiber was used as a source of lignocellulosic filler to fabricate a novel type of cost effective biodegradable composite, based on the aliphatic aromatic co-polyester poly(butylene adipate-co-terephtalate) PBAT (Ecoflex™), as a fully biodegradable thermoplastic polymer matrix. The aim of this research was to improve the new biocomposites' performance by chemical modification using succinic anhydride (SAH) as a coupling agent in the presence and absence of dicumyl peroxide (DCP) and benzoyl peroxide (BPO) as initiators. For the composite preparation, several blends were prepared with varying ratios of filler and matrix using the melt blending technique. The composites were prepared at various fiber contents of 10, 20, 30, 40 and 50 (wt %) and characterized. The effects of fiber loading and coupling agent loading on the thermal properties of biodegradable polymer composites were evaluated using thermal gravimetric analysis (TGA). Scanning Electron Microscopy (SEM) was used for morphological studies. The chemical structure of the new biocomposites was also analyzed using the Fourier Transform Infrared (FTIR) spectroscopy technique. The PBAT biocomposite reinforced with 40 (wt %) of EFB fiber showed the best mechanical properties compared to the other PBAT/EFB fiber biocomposites. Biocomposite treatment with 4 (wt %) succinic anhydride (SAH) and 1 (wt %) dicumyl peroxide (DCP) improved both tensile and flexural strength as well as tensile and flexural modulus. The FTIR analyses proved the mechanical test results by presenting the evidence of successful esterification using SAH/DCP in the biocomposites' spectra. The SEM micrograph of the tensile fractured surfaces showed the improvement of fiber-matrix adhesion after using SAH. The TGA results showed that chemical modification using SAH/DCP improved the thermal stability of the PBAT/EFB biocomposite.