Miscibility and thermal and mechanical properties of poly(butylene terephthalate) (PBT) blends with poly(epsilon-caprolactone) (PCL) were analyzed as a function of the molecular mass of PCL. It was found that the components are miscible when oligomeric PCL is blended with PBT, probably due to favorable interactions between --OH end groups of poly(epsilon-caprolactone) and ester groups of PBT. In the blends containing high molar mass PCL, the concentration of hydroxyl end groups is lower, allowing only partial miscibility of the components. The resulting materials display good mechanical properties, with enhanced performance at rupture compared to plain PBT.