A series of poly(cyclohexylethylene-ran-ethylene) (CE) copolymers were synthesized with statistical segment lengths designed to match that of isotactic poly(propylene) (iPP). Melt blending the CE compounds containing 5070 wt % cyclohexylethylene repeat units with iPP at loadings between 5 and 20 wt % resulted in a dispersion of CE droplets with number-average diameters between 150 and 500 nm as determined by scanning electron microscopy. Linear dynamic mechanical elastic (G') and loss (G '') moduli data were fit to the Palierne model providing estimates for the interfacial tension between iPP and CE, which was interpreted based on enthalpic (chi H) and entropic (chi(S)) contributions to the overall segmentsegment interaction parameter, chi = chi(H) + chi(S), attributed to density and statistical segment length differences, respectively. The small particle sizes are explained by a reduced interfacial tension, driven by minimization of chi(S) (approximate to 0), counterbalanced by chi(H) > 0, establishing an optimal balance between phase separation and dispersion during blending at practical molecular weights. The optically clear blends exhibit superior tensile mechanical properties, with the strain at break increasing from 20% for iPP to 400% at a loading of 5 wt %, attributable to shear yielding of the matrix triggered by cavitation of the uniformly dispersed CE copolymer particles.