A novel and facile method for surface acetylation of cellulose nanocrystals (CN) was developed by reaction with acetic anhydride and hydroxyl groups on the surface of CN. The resultant acetylated cellulose nanocrystals (ACN) exhibited improved dispersion in various organic solvents and reduced polarity as compared with unmodified CN. These ACN were subsequently introduced into a poly(lactic acid) (PLA) polymeric matrix to produce fully biodegradable nanocomposites, which showed superior mechanical performance and thermal stability. This improvement was primarily attributed to uniform dispersion of the ACN and to strong interfacial adhesion between filler and matrix. This high performance and eco-friendly nanocomposite will expand the utilization of cellulose nanocrystals from renewable bioresources and the practical application of PLA-based plastic.