Physical blends of polycarbonate (PC) with polycaprolactone (PCL), containing 0 to 30% PCL were prepared by melt mixing. The compatible blends were studied using differential scanning calorimetry (DSC), dynamic mechanical analysis (DMA), mechanical testing, theological and density measurements. Yield strength, elastic modulus, and density of the blends were found to attain maximum values, depending on PCL content, while T-g continuously decreased. PCL presence resulted in the embrittlement of PC as detected by impact and tensile tests. These combined data lead to propose a mechanism of polymeric antiplasticization in the PC/PCL system; a phenomenon uncommon in polymer-polymer blends. Simultaneously, the PC’s beta-transition intensity was depressed, as detected by DMA. Activation energy of PC secondary relaxation process was found to be higher for PC/PCL blends than for PC. Thus, local, intermolecularly non-cooperative motions, usually associated with beta-relaxation, are restricted in the presence of PCL. The addition of PCL to PC results in increased shear sensitivity and lower high shear rates viscosity, improving processability.