A novel in situ microfiber reinforced blend (MRB) based on poly(ethylene terephthalate) (PET) and polyethylene (PE) was prepared by extrusion-hot stretching-quenching process, and was compatibilized with ethylene vinyl acetate copolymer (EVA) in the presence of the transesterification reaction catalyst, dibutyltin oxide (DBTO). The effects of compatibilization on the essential work of fracture parameters in PET/PE MRB were examined. It is found that the specific essential work of fracture (w(e)) and the specific non-essential work of fracture (w(p)) were significantly increased, when adding 1 and 2.5 phr of EVA to PET/PE MRB and it was further increased with the addition of 0.5 phr of DBTO as the catalyst of the transesterification reaction. The fracture surfaces study by scanning electron microscope (SEM) further proved that EVA is a successful compatibilizer for PET/PP blend. The morphology study of the blends shows that the well-defined fibers with the diameter of several microns were generated in situ during melt extrusion-hot stretch-quenching processing. (C) 2003 Published by Elsevier Ltd.