Poly(lactic acid) (PLA) represents one of the most widely used biodegradable polymers for food packaging applications. While this material provides many advantages, it is characterized by limited antioxidant and UV-barrier properties. Blending PLA with lignin is an attractive strategy to address these limitations. Lignin possesses antioxidant properties and absorbs UV-light and is a widely available low value byproduct of the paper and pulp industry. This study has explored the use of lignin nanoparticles to augment the properties of PLA-based films. A central challenge in the preparation of PLA-lignin nanoparticle blend films is to avoid nanoparticle aggregation, which could compromise optical properties as well as antioxidant activity, among others. To avoid nanoparticle aggregation in the PLA matrix, PLA-grafted lignin nanoparticles were prepared via organocatalyzed lactide ring-opening polymerization. In contrast to lignin and unmodified lignin nanoparticles, these PLA-grafted lignin nanoparticles could be uniformly dispersed in PLA for lignin contents up to 10 wt %. The addition of as little as the equivalent of 1 wt % of lignin of these nanoparticles effectively blocked transmission of 280 nm UV-light. At the same time, these blend films retained reasonable visible light transmittance. The optical properties of the PLA lignin blend films also benefited from the well-dispersed nature of the PLA-grafted nanoparticles, as evidenced by significantly higher visible light transmittance of blends of PLA and PLA-grafted nanoparticles, as compared to blends prepared from PLA with lignin or unmodified lignin nanoparticles. Finally, blending PLA with PLA-grafted lignin nanoparticles greatly augments the antioxidant activity of these films.