In this work, blends of poly(butylene terephthalate) (PBT) and linear low-density polyethylene (LLDPE) were prepared. LLDPE was used as an impact modifier. Since the system was found to be incompatible, compatibilization was sought for by the addition of the following two types of functionalized polyethylene: ethylene vinylacetate copolymer (EVA) and maleic anhydride-grafted EVA copolymer (EVA-g-MAH). The effects of the compatibilizers on the rheological and mechanical properties of the blends have been also quantitatively investigated. The impact strength of the PBT-LLDPE binary blends slightly increased at a lower concentration of LLDPE but increased remarkably above a concentration of 60 wt % of LLDPE. The morphology of the blends showed that the LLDPE particles had dispersed in the PET matrix below 40 wt % of LLDPE, while, at 60 wt % of LLDPE, a co-continuous morphology was obtained, which could explain the increase of the impact strength of the blend. Generally, the mechanical strength was decreased by adding LLDPE to PET. Addition of EVA or EVA-g-MAH as a compatibilizer to PBT-LLDPE (70/30) blend considerably improved the impact strength of the blend without significantly sacrificing the tensile and the flexural strength. More improvement in those mechanical properties was observed in the case of the EVA-g-MAH system than for the EVA system. A larger viscosity increase was also observed in the case of the EVA-g-MAH than EVA. This may be due to interaction of the EVA-g-MAH with PET.