In this study, effects of molecular structure transformation of canna starch (CS) in oxidation condition on physicochemical characteristics of thermoplastic starch were examined. Thermoplastic starch (TPS) samples of CS and respective oxidized starch (in 1, 3 and 5% of sodium hypochlorite, w/w) were prepared by using an internal mixer with the presence of 30 wt% of glycerol as plasticizer. The physicochemical, morphological, thermal, and mechanical properties of native starch-based TPS (NTPS) and oxidized starch-based TPS (OTPS) samples were evaluated. The content of carboxyl and carbonyl groups in oxidized canna starch (OCS) increased with the increase in the content of oxidant, leading to an improvement in the plasticization of CS. FTIR spectra of OTPS samples showed the stronger interaction between oxidized starch and plasticizer. SEM images of fracture surface indicated that the morphology of OTPS samples were smoother than that of NTPS samples. XRD patterns confirmed that the crystallite type of starches was also clearly changed after extrusion process and the decrease in crystallinity of OTPS samples is attributed to effects of both oxidation and plasticization. DSC results indicated that Tg of OTPS was greatly influenced by the carbonyl and carboxyl content and the higher content of these groups in oxidized starched could help the plasticization becomes easier. The better plasticization in OTPS samples resulted in the better mechanical properties and thermal stability of OTPS. The outcome suggested that the use of oxidized starch is an effective method to improve the plasticization in preparing thermoplastic starch.