The blocked isocyanate group (BHI) was synthesized to improve the storage stability of HI (2-hydroxyethyl methacrylate combined with isophorone diisocyanate) and characterized by Fourier transform infrared spectroscopy (FTIR). High-density polyethylene grafted with the blocked isocyanate group (HDPE-g-BHI) was used as a re active compatibilizer for an immiscible high-density polyethylene/poly(ethylene terephthalate) (HDPE/PET) blend. A possible reactive compatibilization mechanism is that regenerated isocyanate groups of HDPE functionalized by BHI react with the hydroxyl and carboxyl groups of PET during melt blending. The HDPE-g-BHI/PET blend showed the smaller size of a dispersed phase compared to the HDPE/PET blend, indicating improved compatibility between HDPE and PET. This increased compatibility was due to the formation of an in situ graft copolymer, which was confirmed by dynamic mechanical analysis. Differential scanning calorimetry (DSC) analysis represented that there were few changes in the crystallinity for the continuous PET phase of the HDPE-g-BHI/PET blends, compared with those of the HDPE/PET blends at the same composition. Tensile strengths and elongations at the break of the HDPE-g-BHI/PET blends were greater than those of the HDPE/PET blends.