In this study, cellulose nanocrystal (CNC) dispersion within polybutylene adipate terephthalate (PBAT) was investigated. PBAT/CNC nanocomposites with various CNC contents were prepared through solution casting as well as dilution of a solution casted masterbatch using a twin screw extruder. The efficiency of two different preparation approaches on CNC dispersion was assessed by transmission electron microscopic and rheological analysis. It was found that solution casted PBAT/CNC nanocomposites had a much better CNC dispersion compared to that of their melt processed counterparts. This was while the diluted melt processed cases also revealed a good level of CNC dispersion. As a result, CNC was able to form a percolation network within PBAT at CNC contents of around 2 and 4 wt% in the two approaches, respectively.