Ternary blends of isotactic polypropylene (PP), ethylene-octene copolymer (mPE), and high-density polyethylene (HDPE) were prepared by melt mixing in a twin-screw extruder with two different sequences of mixing: the simultaneous mixing of the three components (method 1) and the premixing of mPE and HDPE followed by mixing with PP (method IT). Regardless of the mixing sequence, mPE encapsulated HDPE in the PP matrix, although better mechanical properties were generally obtained with method II. The domain size was mainly determined by the viscosity ratio of mPE to PP in method I and by the viscosity ratio of the binary blend (mPE/HDPE) to PP in method II. Specimens prepared by injection molding gave much finer dispersions than compression-molded specimens. (C) 2004 Wiley Periodicals, Inc.