This study investigated the sustainable toughening of polylactic acid (PLA) by incorporating ultrafine fully vulcanized powdered natural rubber graft-copolymerized with poly-styrene-co-acrylonitrile (UFPNR-SAN). We investigated the effect of the styrene-to-acrylonitrile ratio (ST:AN) used during the grafting process on the final UFPNR-SAN compatibility with PLA. The ST:AN ratio was systematically varied during the grafting reaction to prepare UFPNR-SAN with a range of different surface energies. The ST:AN ratio of 4:1 showed the highest compatibility with the PLA matrix, attributed to optimal interfacial interactions and improved dispersion, as indicated by contact angle measurements and SEM observations. This resulted in a remarkable toughening of the PLA/UFPNR-SAN composite. For instance, an obvious fully ductile behavior without crack formation and flexural strain of around 17.5% against 5% of the neat PLA was recorded. In addition, 3.5 times improvement in the impact strength of the composite at 25 wt% dosage of the UFPNR-SAN was also achieved without compromising thermal properties. Overall, this study established the suitable ST:AN ratio on the grafting onto natural rubber to enhance interfacial interactions with PLA and its effects on the properties of the resulting PLA/UFPNR-SAN bio-based composite.