During melt mixing a ternary blend system comprised of a high density polyethylene matrix containing dispersed polystyrene and poly(methyl-methacrylate) spontaneously forms a composite droplet structure where the PS encapsulates the PMMA. This study demonstrates that the PS/PMMA composite droplet exhibits pure PS droplet behavior at a critical volume fraction of encapsulating phase (PSYMMA similar to 0.6:0.4). This critical volume fraction is shown to be independent of the overall dispersed phase concentration, shell thickness or dispersed phase size. Furthermore, the effect is observed even though the PMMA is significantly more viscous than the encapsulating PS phase. Interfacial slip as well as the maintenance of a complete PS shell during deformation are proposed as being important factors related to this behavior. The blends were prepared via melt mixing using an internal mixer and the morphology was examined by electron microscopy. (C) 2003 Published by Elsevier Ltd.