Abstract: A biodegradable plastic composition, which may be in the form of a molded dy, includes gelatinized starch and a biodegradable, aliphatic polyester resin having a melting point of 45.degree.-130 .degree. C. The plastic is produced by kneading a blend containing a starchy substance selected from non-gelatinized, granular starch and gelatinized starch and the aliphatic polyester resin at a temperature higher than the melting point of the aliphatic polyester in the presence of water in an amount of 1-45 % based on the weight of the starchy substance.