A twin screw extrusion processing method was developed for the preparation of thermoplastic starch (TPS) for packaging applications. Different plasticizer combinations were used looking for the minimal temperature profile in the extruder in order to prevent the thermal degradation of TPS. The effect of storage time at 25 °C and 50% of relative humidity on the properties of TPS was studied. Plasticized TPS samples observed by scanning electron microscopy showed homogeneous fracture surfaces without unstructured starch granules. X-ray diffractometry tests showed retro gradation of all TPS formulations with progressive Vh-type crystal structure formation. Temperature for maximum thermal degradation rate of raw materials was shifted to higher values after preparing the TPS, suggesting not only physical but also chemical interactions between plasticizers and starch molecules. Mechanical properties were significantly improved replacing 10 wt. % of glycerol by water as plasticizer, which was attributed to the increased gelatinization degree and the reduction of thermal degradation.