Positron annihilation lifetime spectroscopy(PALS), capable of probing free volume, is used to study the effect of compatibilizer concentration, compatibilizer type, and the effect of blend processing on the morphology and properties of an immiscible linear low-density polyethylene/polypropylene system. It is proposed that improvement of fracture toughness due to compatibilization can be attributed to the packing (and bonding) at interfaces. Improved interfacial packing and bonding result in lower free volume concentration than expected from component additivity, with a concomitant increase in plastic deformation on impact.