This article focuses on the effect of molecular weight of poly(butylene adipate‐co‐terephthalate) (PBAT) on the immiscible poly(lactic acid) (PLA)/PBAT blends compatibilized with epoxidized polyhedral oligomeric silsesquioxanes (Epoxy‐POSSs) having different numbers of epoxy groups per molecule. Mechanical, thermomechanical, thermal, rheological, and morphological properties of the blends were investigated as a function of PBAT molecular weight and epoxy‐POSS type. Mechanical tests revealed that all epoxy‐POSS types significantly improved the performance of the blends containing low‐molecular‐weight PBAT. On the other hand, epoxy‐POSS with three epoxy functional groups (TriEpPOSS) and Epoxy‐POSS with multiple‐epoxy functional groups (MuEpPOSS) only slightly improved the performance of blends with high‐molecular‐weight PBAT. Thermomechanical and thermal test results supported that the compatibilization effects of the epoxy‐POSSs were more prominent in the PLA/PBAT blends with low‐molecular‐weight PBAT due to the observation of the shifts in the glass transition temperatures of the PLA phase. According to the rheological results, the addition of epoxy‐POSSs increased the interactions between the PLA and PBAT phases much more effectively in the PLA/PBAT with low‐molecular‐weight PBAT. The dispersed phase size of the PBAT further decreased in the low‐molecular‐weight PLA/PBAT blend system due to the enhanced compatibility much better. POLYM. ENG. SCI., 60: 398–413, 2019. © 2019 Society of Plastics Engineers