Biocomposites from poly(butylene succinate) (PBS) and perennial grass (miscanthus fibers) were successfully prepared by extrusion and injection molding methods with different fiber loadings. The tensile strength of uncompatibilized PBS/miscanthus composites was much lower compared to that of neat PBS. Unlike tensile strength, the flexural and impact strengths were significantly enhanced after incorporation of miscanthus fibers into the PBS matrix. The enhanced flexural strength was attributed to the reinforcing effect of miscathus fibers. The fiber pull-out mechanism is likely responsible for the observed impact strength improvement. Addition of 5 wt % maleic anhydride (MAH) grafted PBS (MAH-g-PBS) into PBS composites showed a significant improvement in tensile and flexural strength compared to the corresponding uncompatibilized composites and neat matrix. For example, the PBS composites with 50 wt % miscanthus fiber and 5 wt % MAH-g-PBS resulted in 22, 139, and 47% improvements in tensile, flexural, and impact strength compared to neat PBS. These improvements were attributed to the enhanced interfacial interaction between the components, as confirmed by adhesion parameter values and by surface morphological analysis. The load-bearing capacity of the compatibilized and uncompatibilized PBS/miscanthus composites was analyzed using a mathematical model. Overall, this study provides an option for preparing a sustainable biocomposite with superior mechanical and thermo-mechanical properties.