High hemicellulose and lignin content MFC (MFLC) was isolated from chemithermomechanical pulp (CTMP), and surface acetylation used to significantly decrease its polarity. This modification of MFLC provided good dispersibility in PLA when used for biocomposites fabrication via a solvent casting method. MFLC exhibited higher modification efficiency compared to lignin-free MFC. Base-catalysed surface acetylation unchanged the crystalline structure of MFLC. Detection of the hydrogen bond between acetylated MFLC (AcMFLC) and PLA confirmed its role in improvement of the mechanical performance, thermal properties and crystallinity of the biocomposite with Ac-MFLC acting as an effective reinforcing and nucleating agent. The approach confirms the suitability of surface functionalization of MFLC for fabrication of biocomposites for a wide range of applications such as packaging and biomedical products.