In this study the influence of the molecular weight of the dispersed phase components on encapsulation effects in the composite droplet phase was examined for high density polyethylene (HDPE)/PS/PMMA ternary blends. Three different blends composed of various PS and PMMA materials dispersed in an HDPE matrix were prepared using an internal mixer. The morphology was studied by light and electron microscopy. Current models used for predicting encapsulation effects and composite droplet formation in ternary systems (based on static interfacial tension) predict in all cases that PS will encapsulate the PMMA. However, in one case, an unexpected encapsulation of PS by PMMA was observed. It was found that arguments based on the effect of viscosity ratio or the absolute viscosity of the different dispersed phases do not explain that discrepancy. In addition, the reversal of that latter composite droplet morphology from PMMA encapsulating PS to PS encapsulating PMMA was observed upon annealing treatment. Considering all the above, a conceptual model was developed to predict encapsulation effects in composite droplet type systems based on the use of a dynamic interfacial tension (i.e. taking into account the elasticity of the polymer components). Calculations based on the dynamic interfacial tension model, using elasticities based on constant shear stress, were able to account for all of the observed encapsulation effects in this study.