A functionally effective compatibilizer for PET/PPE blends is highly necessary to fabricate white opaque polyester film having high reflectance through drawing process. In this study, the effects of three different compatibilizers (SAN-g-MAH, SMA-16 and polystyrene-g-oxazoline PS-g-OXA) on the morphological, thermal, mechanical, and rheological properties in the PET/PPE (70/30, wt%) blend system were investigated. For the morphological studies, upon the addition of 7 part(s) per hundreds by weight (phr) of PS-g-OXA, the smallest domain size was observed among the three types used as a compatibilizer. Similarly, for the mechanical and rheological studies, upon the addition of 7 phr of PS-g-OXA, the optimal properties among three different compatibilizers were demonstrated due to the increased tensile strength and complex viscosity. For the thermal study, when the amount of PS-g-OXA added as a compatibilizer exceeded the threshold of the blend system, the Tg of the polyphenylene ether (PPE) was exhausted. In the morphological studies, the compatibilization effect was observed in the surface roughness of the film after stretching. It was concluded that PS-g-OXA was the effective compatibilizer for improving the reflectivity to make white opaque polyester film in PET/PPE blend system. It was concluded that this was due to compatibilization effects. Based on the results, the changes in properties were observed for biaxially oriented polyethylene terephthalate (PET)/PPE (70:30, wt%) blend films.