Melt processing of cellulose nanocrystals (CNCs) reinforced nanocomposites is still a serious challenge due to the hydrophilic nature of CNCs and their severe agglomeration tendency within the polymer melt. In this study, chemical modification of CNC through grafting poly(glycidyl methacrylate) (PGMA) with various degrees was implemented. Wettability of the modified CNCs (mCNCs) were controlled and their structure was characterized through Fourier transform infrared spectroscopy (FTIR), X-ray photoelectron spectroscopy (XPS), optical microscopy, X-ray diffraction (XRD), thermogravimetric analysis (TGA), and differential scanning calorimetry (DSC). The nanocomposites of polybutylene adipate terephthalate (PBAT) with 3 wt% CNC and mCNC were prepared using an internal melt mixer. To differentiate the effects of CNC and PGMA molecules on the final properties of nanocomposites, PBAT/PGMA compounds were separately prepared. To confirm the chain characterization and molecular weight of the synthesized PGMAs, 1H NMR and gel permeation chromatography (GPC) analysis were conducted. Melt rheological analysis, dynamic mechanical analysis (DMA), DSC, and atomic force microscopy (AFM) were used to monitor the mCNC dispersion quality and the effect of PGMA modification in PBAT compounds. The results revealed that grafting CNC with longer PGMA considerably improved the CNCs' dispersion quality within PBAT. Such dispersion enhancement of long-chain mCNCs and interfacial interaction of PGMA and PBAT resulted in a noticeable increase in storage modulus and complex viscosity of the final nanocomposites.