Despite many investigations, phase inversion in rubber/plastic blends and its origin are far from being understood. Here we focus on the heterogeneous phase inversion in partially miscible blend of polyolefin elastomer (POE) and polypropylene (PP) using the classical density functional approach. We have shown that the blend decomposes into the POE-rich and PP-rich phases on the surfaces of POE or PP domains. For example, the free energy barriers and critical sizes of the POE-rich droplets on the two surfaces obviously decrease compared to the analogous values in the homogeneous nucleation. These values can be further reduced after introduction of nanoparticles, which act as the compatibilizer, improving morphology and final properties of the blend. These results indicate different phase inversion mechanisms in the blend, and can explain why different sizes of nanoparticles can observed in experiments. (C) 2018 Elsevier Ltd. All rights reserved.