Abstract The trend to replace traditional non‐biodegradable plastics with fully biodegradable plastics is the long‐term solution for mitigating the environmental impact of persistent plastic pollution. Poly(butylene adipate‐co‐butylene terephthalate) (PBAT) becomes highly desirable due to its similar physical property to low‐density polyethylene and 100% biodegradability. To enhance the property of PBAT for practical usage, various additives are needed, which are often environmentally unfriendly. In this work, chemically reactive biophenolic polysiloxanes are synthesized through the hydrosilylation addition between the hydrogen‐terminated polysiloxane and the benign product eugenol, catalyzed by the non‐homogeneous platinum. The obtained phenol hydroxyl terminated polysiloxane (PHTP) is used for modified PBAT. By adding 1 wt% of PHTP, the maximum elongation at breakage of 1335.0% is achieved with the improved crystallinity of the composites by 24.2% due to the uniformly PHTP in the PBAT matrix blend. Their morphology, corresponding mechanical properties (tensile and fracture strain), and thermal stability are evaluated as a function of PHTP content. More important, an appropriate amount of PHTP plays an important role in the nucleation centers in the PBAT matrix, confirmed by the positive correlation between the PBAT crystallinity and the amount of PHTP added. A strategy for improving the performance of PBAT‐based environmentally friendly materials is provided within our work.