In the present study, zinc oxide nanoparticles (ZnO-NPs) were synthesized by a hydrothermal method followed by the fabrication of polylactic acid/polycaprolactone blend (PLA/PCL, 80/20 wt/wt) at various loadings of ZnO-NPs (2, 4, and 6 wt%) via melt mixing. FTIR and XRD patterns confirmed that the ZnO-NPs were successfully synthesized. The ZnO-NPs with an average diameter of about 46–73 nm were observed by the FESEM analysis. The effect of ZnO-NPs on morphological, thermal, UV absorption, mechanical, photochemical degradation, rheological and cell viability properties of PLA/PCL blend were investigated. FESEM micrographs of bionanocomposites demonstrated that polycaprolactone was dispersed as a droplet to the Polylactic acid matrix phase. DSC analysis showed that the addition of ZnO-NPs increased the degree of crystallinity and melting temperature of the PLA. Mechanical assessment of the bionanocomposites reveals that the addition of 2, 4 and 6 wt.% of ZnO-NPs into the blend sample leads to increase in the tensile modulus by about 5.4, 11 and 24%. The MTT assay results implied that cell viability of the both filled and unfilled samples is greater than 90% indicating their biocompatibility to the fibroblast cells. It is observed that the melt linear viscoelastic properties of the prepared bionanocomposites are under control of LA/PCL chain degradation and hydrodynamic nanoparticles interaction.