•An aqueous phase reaction has been applied for surface modification of MFC.•Surface modified and oven dried MFC has significantly reinforcement effect for PLA.•Modified MFC has improved compatibility and dispersion in PLA matrix. Microfibrillated cellulose (MFC) is widely used as a reinforcement filler for biocomposites due to its unique properties. However, the challenge of drying MFC and the incompatibility between nanocellulose and polymer matrix still limits the mechanical performance of MFC-reinforced biocomposites. In this study, we used a water-based transesterification reaction to functionalize MFC and explored the capability of oven-dried MFC as a reinforcement filler for polylactic acid (PLA). Remarkably, this oven-dried, vinyl laurate–modified MFC improved the tensile strength by 38 % and Young’s modulus by 71 % compared with neat PLA. Our results suggested improved compatibility and dispersion of the fibrils in PLA after modification. This study demonstrated that scalable water-based surface modification and subsequent straightforward oven drying could be a facile method for effectively drying cellulose nanomaterials. The method helps significantly disperse fibrils in polymers and enhances the mechanical properties of microfibrillar cellulose-reinforced biocomposites.