In this study, poly(lactic acid) (PLA) was blended with silicone rubber (SR) to improve its impact strength and toughness by using dynamic crosslinking in the presence of peroxide during melt compounding. The SR to PLA ratio, peroxide and coagent concentrations were taken as experimental parameters. Blends were evaluated in terms of their thermal properties, tensile and impact strengths, dynamic mechanical properties, and micro‐structure. Results showed that PLA was successfully toughened with SR using dynamic crosslinking. Impact strength and energy of fracture in tensile test improved up to 4 and 10 times, respectively. On the other hand, yield strength and stiffness of blends deteriorated by the incorporation of SR. Thermal analysis pointed out that presence of SR decreased the cold crystallization temperature. It was observed from scanning electron microscopy (SEM) that the energy absorbing mechanism under impact loads in PLA/SR blends is tortuosity in the crack patterns. POLYM. ENG. SCI., 54:2029–2036, 2014. © 2013 Society of Plastics Engineers