The intrinsically impact-brittle PC / PET blends can be effectively toughened, in terms of lower ductile brittle transition temperature (DBTT) and reduced notch sensitivity, by incorporating butylacrylate core-shell rubber. The rubber particles are distributed exclusively in the PC phase. Varying the PC melt flow rate (MFR) is more important than varying the PET I.V. to vary the low temperature toughness of the blends. PC with MFR = 3 is essential to produce the toughest PC / PET / rubber blend. The presence of rubber slightly relieves the strain rate sensitivity on yield stress increase. Lower MFR PC in the blend results in smaller activation volume and, therefore, higher strain rate sensitivity, because a greater number of chain segments are involved in the cooperative movement during yielding. Two separate modes, localized and mass shear yielding, work simultaneously in the rubber toughening mechanism. The plane-strain localized shear yielding dominates the toughening mechanism at lower temperatures and brittle failure, while the plane-stress mass shear yielding dominates at higher temperatures and ductile failure. The critical precrack plastic zone volume has been used to interpret the observed phenomenon.