A chemically modified plasticized starch (CMPS) is prepared by reacting starch with an organic dibasic acid or an anhydride of the acid in the presence of a plasticizer using optional free radical initiators, and optionally with the incorporation of nano clays in the reactive extrusion process. The starch is thermoplastic and has a lower viscosity than the traditional thermoplastic starch. The CMPS is useful in preparing starch polymer compositions which are at least partially biodegradable.