Poly(butylene adipate-co-terephthalate) (PBAT)/nano-alumina (NA) composite films were prepared using extrusion and compression moulding processes. The aim of this work is to improve the performance property of PBAT. Concentration of NA varied from 0.1 to 5 wt% in PBAT. The prepared films were characterised for mechanical (tensile strength (T_S), tensile modulus (T_M) and elongation at break (PEB)), thermal (melting temperature (T_m) and enthalpy of melting (H_m)), rheological (viscosity vs. shear rate), morphological (SEM), barrier (water vapour permeability (WVP) and oxygen permeability(OP)) and crystallinity (x-ray diffraction) properties. PEB and crystallinity decreased, whereas, T_S and T_m remained unaffected on addition of NA in PBAT, as the addition of NA decreased the crystallinity of PBAT. Nevertheless, significant reduction in WVP and OP of 59 and 33% were obtained for 3 wt% addition of NA in PBAT. H_m and viscosity of PBAT decreased with increase in concentration of NA, due to the thermally conducting nature of NA. Considering the obtained properties, PBAT containing 3 wt% NA can be a potential material for food and pharmaceutical packaging applications.