The sense of touch is fundamental to how we interact with the physical and digital world. Conventional interactive surfaces and tactile interfaces use electronic sensors embedded into objects, however this approach poses serious challenges both for environmental sustainability and a future of truly ubiquitous interaction systems where information is encoded into everyday objects. In this work, we present Biodegradable Interactive Materials: backyard-compostable interactive interfaces that leverage information encoded in material properties. Inspired by natural systems, we propose an architecture that programmatically encodes multidimensional information into materials themselves and combines them with wearable devices that extend human senses to perceive the embedded data. We combine unrefined biological matter from plants and algae like chlorella with natural minerals like graphite and magnetite to produce materials with varying electrical, magnetic, and surface properties. We perform in-depth analysis using physics models, computational simulations, and real-world experiments to characterize their information density and develop decoding methods. Our passive, chip-less materials can robustly encode 12 bits of information, equivalent to 4096 unique classes. We further develop wearable device prototypes that can decode this information during touch interactions using off-the-shelf sensors. We demonstrate sample applications such as customized buttons, tactile maps, and interactive surfaces. We further demonstrate the natural degradation of these interactive materials in degrade outdoors within 21 days and perform a comparative environmental analysis of the benefits of this approach.