The effects of gamma irradiation on the morphology and physical properties of various blends based on poly(3-hydroxybutyrate-co-3-hydroxyvalerate) (PHBV) and polylactide (PLA): 50/50 w/w were studied with and without PHBV-g-MA and organomodified montmorillonite used as the compatibilizer and reinforcement agent, respectively. The different blend compositions prepared by melt compounding were compression molded to thin films of an average thickness of 150 μm, and subjected to 25, 50 and 100 kGy at room temperature; the dose rate being 1.0 Gy/h. Infrared spectra analysis indicated the occurrence of some chemical modifications in the irradiated samples, in particular an absorbed dose of 100 kGy resulted in the formation of a large absorption band in the carbonyl region. Size exclusion chromatography (SEC) data showed a decrease in the average molecular weight for all irradiated samples with increasing absorbed dose due to chain scission. Nanoindentation tests showed that γ-irradiation significantly decreased both modulus and hardness of neat PHBV and neat PLA after 100 kGy, whereas no noticeable changes were observed for PHBV/PLA blends. Thermogravimetric analysis (TGA) and pyrolysis combustion flow calorimetry (PCFC) tests revealed that the organomodified clay can act as a compatibilizer and compensate for the effect of irradiation on both thermal stability and fire retardancy of PHBV/PLA blends.