In order to improve the compatibility with different polymer matrices, microfibrillated jute cellulose (MFJC) was surface grafted by oligo(l-lactic acid) (OLA) via graft polycondensation reaction catalyzed by Sn(Oct)2 in toluene medium. The effects of the OLA concentration, Sn(Oct)2 concentration, reaction time, temperature, and pressure on the progress of the graft polycondensation were investigated. Maximum grafting was found 44% at optimum reaction condition. The observation was confirmed by Fourier transform infrared spectroscopy, 13C-NMR spectrometry, and X-ray photoelectron spectroscopy. The morphology and crystalline structure of the graft copolymer (MFJC-g-OLA) were examined by scanning electron microscopy and wide angle X-ray diffraction, respectively. Measurements showed that initial morphological integrity of MFJC changed due to incorporation of amorphous OLA onto MFJC surface, as a result decreases crystallinity. Extracted MFJC-g-OLA was also characterized by thermo-gravimetric analysis. Results reflect the enhanced hydrophobicity and thermal stability of the MFJC as a consequence of this modification. © 2013 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2014, 131, 40139.