Blends of poly(caprolactone)-poly(ethylene glycol) block copolymer (PCE) with polypropylene (PP) were extruded followed by compression moulding. The compatibility and degradation behaviour of the blends were investigated. The results showed that the PCE phase tended to disperse as discrete particles in the PP matrix of the PP/PCE 75/25 blend. This discrete PCE phase was incompatible with the PP matrix. Maleic anhydride (MA) grafted PP was found to improve the compatibility between the PCE and PP phases effectively. Consequently, the MA-compatibilized PP/PCE 75/25 blend experienced significant losses in weight and tensile strength, compared with uncompatibilized PP/PCE 75/25 blend, after immersion in a buffer solution (pH = 6.0) at 45 degrees C for extended periods of time. Water sorption and contact angle measurements also revealed that MA-compatibilized PP/PCE 75/25 blend is more hydrophilic than the uncompatibilized counterpart. The effect of the compatibilizing agent on the morphology and degradation behaviour of PP/PCE blends is discussed.