Reinforcement with natural fibres is a common method to improve impact properties of poly(lactic acid) (PLA). In this study, composites made from PLA and bamboo particles were melt-compounded in a twin-screw extruder and formed by compression moulding. Tensile, flexural, and impact tests were conducted. Particle size (A), particle loading (B), screw speed (C), and die temperature (D) were varied at three levels. Tensile strength and modulus, flexural strength and modulus, and impact strength were the response variables. The experiment design was based on Taguchi’s (L9) orthogonal array. Through variance analysis, the particle loading was found to be the dominant factor influencing the mechanical properties, followed by die temperature. The optimum parameters were validated with a confirmation test. The results showed a noticeable improvement of impact properties compared to neat PLA by 55%, without compromising tensile and flexural properties. Flexural strength, flexural modulus, and tensile modulus of the composites were greater than that of pure PLA. However, only tensile strength was reduced by about 28% compared to pure PLA. Importantly, the DOE method with maximizing the desirability properties was found to be an effective systematic approach to identify an optimal parameter setting of the extrusion moulding process.