ABSTRACTPoly‐3‐hydroxybutyrate (PHB) is a widely distributed carbon storage molecule in prokaryotes and can serve as a biodegradable plastic replacement. However, the handling and material properties of virgin PHB are not as robust as some traditional petroleum‐based plastics. Additives can be added to PHB to improve its qualities, but these additives are themselves often not biobased. A strategy was developed to utilize lower molecular weight PHB fragments derived from the recycling process as biobased additives. To simulate recycling, PHB was thermolyzed at elevated temperatures, and this degraded PHB (dPHB) was reactively processed with virgin PHB. Incorporation of dPHB nucleated and plasticized the virgin PHB as evidenced by increased crystallization temperature and crystallinity as well as decreased melt viscosity, stiffness, and melting temperature. Additionally, samples containing dPHB had increased toughness. Processing with dPHB decreased Mn, had little effect on Mw, and increased the Z‐average molecular weight, indicating branching. These results demonstrate a route for nucleating, plasticizing, and toughening virgin PHB by using recycled PHB. © 2018 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2019, 136, 47432.