Poly(butylene adipate-co-terephthalate) (PBAT) is one of the major commercialized biodegradable poly- mers. But modification of PBAT is still necessary to satisfy requirements of various applications. In this study, PBAT-based sulfonated copolyesters (PBATsI) with various compositions (7–12 mol% sulfonated unit) were synthesized by copolycondenation using dimethyl isophthalate-5-sulfonate sodium (SIPM) as a functional comonomer. The copolyesters were characterized with 1 H NMR, viscometer, DSC and XRD, and evaluated with TGA, tensile, gas barrier, contact angle and water dispersion testing. For the first time, it was found that the sulfonated copolyesters manifest improved color, clearly higher O 2 and CO 2 bar- rier properties, better hydrophilicity and excellent water dispersibility when compared with PBAT. The copolyesters containing 9–12 mol% BsI unit can be facilely dispersed in water to obtain stable dispersions with unimodal particle size distribution in < 100 nm range. These advantages may help them to find uses in tuning biodegradation rate of PBAT and further physical modification of PBAT.