A polyester-grafted starch-polymer alloy is capable of imparting practical flexibility and toughness to moldings with no or only a little plasticizer. The polyester-grafted starch-polymer alloy comprises a blend of a polyester-grafted starch (a starch which has polyester graft chains on the starch molecule, with the terminal hydroxyl groups of the polyester graft chains and the hydroxyl groups connected directly to the starch entirely or partly blocked with the ester group) and an independent polyester (a polyester which is constructed of the same unit as said polyester graft chain, with its terminal hydroxyl groups entirely or partly blocked with the ester group) which are uniformly mixed together. A method of preparing the alloy and thermoplastic resin compositions containing the alloy also are disclosed.