In this work, the composites based on PLA reinforced with hydrophobic-modified NCF were prepared; the WVTR of paper coated with the resulting composites were also investigated.NCF was chosen prior to other types of cellulose since the composite materials containing NCF are a promising class of new materials (Eichhorn et al., 2010; Moon, Martini, Nairn,Simonsen, & Youngblood, 2011). The NCF was modified by grafting hydrophobic monomers via free radical polymerization to improve compatibility with the PLA matrix. The hydrophobic modification of NCF facilitated its dispersion in tetrahydrofuran (THF), a solvent used to dissolve PLA. After modification, the NCF-PLA composites were made by a solvent casting method; the properties of composites as well as the WVTR of paper coated with the composites were determined. The key objectives in this work were to improve the compatibility of PLA and NCF via hydrophobic modification and to lower the WVTR of paper via PLA-NCF composite coating.