Blending of recycled polyethylene terephthalate (RPET) from waste bottles with polypropylene (PP) was performed in an attempt to enhance the processability of RPET. The idea of blending RPET with PP sprouted from the intention of recycling PET bottles together with their PP-based caps. Therefore, preliminary blending of RPET with neat PP (RPET/PP) was performed at various PP and compatibilizer contents. Morphological analyses on the extruded pellets of uncompatibilized blends indicate that the PP particle size and state of dispersion at skin and core regions were vastly different. The particles at the skin were at least 10 times smaller than that at the core although the size distribution was very wide. With the incorporation of just 5 phr of compatibilizer, the particles at the core region became significantly smaller and appeared to emulate that of the skin region. Furthermore, the overall homogeneity of the blends was vastly improved irrespective of PP content in the blend. The reduction in particle size and improved homogeneity inherently reduced stress concentration points and enhanced the mechanical performance of the blends. More importantly, the incorporation of PP into RPET significantly increased the degradation temperature of the blends, provided the dispersion of PP phase in RPET was excellent. (c) 2011 Wiley Periodicals, Inc. J Appl Polym Sci, 2011