Residues from the polyethylene (PE) film mulch (PM) in the south of China have caused severe soil pollution and reduction of crop yield. Biodegradable film mulch (BM) has been considered as a good alternative to PM for many crops, but its suitability for winter-planting potato (Solanum tuberosum L.) and the effects of its residues after incorporation on soil and succeeding crop have not been fully investigated. We conducted a two-year (2018–2019 and 2019–2020) field experiment to compare the effects of polylactic acid (PLA)/ poly(butylene-adipate-co-terephthalate) (PBAT)-based BM, PM, and no film mulch (NM) on dynamics of soil temperature and water storage, water use efficiency (WUE), and potato yield, as well as the effects of their residues on rice yield and soil properties thereafter in 2020. The results showed that the soil temperature and soil water storage differed between treatments BM and PM in topsoil at later stages of potato growth due to the degradation of biodegradable film initiated at 60 days after sowing. However, there were no significant differences between treatments BM and PM on potato tuber yield and WUE across two cropping seasons. After harvest of rice, the residual biodegradable films (RBF) were reduced to an extremely low level, and did not cause yield loss of rice statistically as compared to the no residual film (NRF) treatment. In addition, RBFs could improve soil health regarding bulk density, porosity and organic matter as compared to the residual PE film (RPF) treatment. Therefore, we are confident that the PLA/PBAT biodegradable film is a promising and sustainable option to replace PM in winter-planting potato production.