This work aims to fabricate the water-based suspension of poly(butylene succinate--adipate) (PBSA) particles by an oil-in-water emulsion technique for use as coating agents to enhance paper-based packaging performances and sustainability. A commercial PBSA resin is functionalized by sizing down an approach via microwave-assisted alcoholysis using propylene glycol (PG). The effect of PBSA/PG feed ratio on the structures, properties, and particle formability of the alcoholized (aPBSA) products is examined. H NMR results reveal that the average molecular weight of the aPBSA product decreases to half that of neat PBSA when using a ratio of 24:1 and further decreases to a quarter at 6:1. By using small-size aPBSA, the obtained water-based particles show high stability due to high hydroxyl content and poly(vinyl alcohol) assistance. The suspension is then sprayed on a kraft paper substrate and heated at 60 and 100 °C. SEM results reveal that the submicron aPBSA particles penetrate the paper matrix, filling the paper's pores and forming a protective, smooth layer on the paper surfaces. The coated paper shows high water resistance (Cobb value of 19.6 g/m) and water vapor transmission rate (1160 g/(m day)). In addition, the aPBSA-coated layers do not impede the paper's repulping and recycling processes, making it a promising solution for improving the sustainability of paper-based packaging.