Kraft lignin (KL) or plasticized KL (PKL)/poly(lactic acid) (PLA) composites, containing different lignin contents and with and without the coupling agent, were prepared in this study using twin-screw extrusion at 180 °C. Furthermore, ε-caprolactone and polymeric diphenylmethane diisocyanate (pMDI) were used as a plasticizer of KL and a coupling agent to improve interfacial adhesion, respectively. It was found that lignin plasticization improved lignin dispersibility in the PLA matrix and increased the melt flow index due to decrease in melt viscosity. The tensile strength of KL or PKL/PLA composites was found to decrease as the content of KL and PKL increased in the absence of pMDI, and increased due to pMDI addition. The existence of KL and PKL in the composites decreased the thermal degradation rate against the temperature and increased char residue. Furthermore, the diffusion coefficient of water in the composites was also found to decrease due to KL or PKL addition.