The goal of this work was to evaluate the effect of chemical modification of cellulose nanofibers (CNF) on the properties of polylactic acid (PLA) nanocomposites. Acetylated nanofibers (ACNF), with degree of substitution 1.07, were isolated from acetylated kenaf fibers by mechanical treatments. Acetylated nanofibers showed more hydrophobic properties compared to non-acetylated ones. The results showed that both crystallinity and thermal stability of acetylated nanofibers were lower than non-acetylated ones. The nanocomposites were prepared by premixing two PLA master batches, one with a high con-centration of ACNF and the second with CNF. These were diluted to final concentrations (5 wt%) during the extru-sion. The morphology studies of PLA and its nanocom-posites showed nanofiber aggregates in both materials. The results showed that the tensile and dynamic mechanical properties were enhanced for both acetylated and non-acetylated nanocomposites compared to the neat PLA matrix while no significant improvement was observed for the acetylated nanocomposites compared to non-acetylated ones. However, the storage modulus increased slightly for acetylated nanocomposites compared to non-acetylated ones.