The effects of compatibilizer and crosslinking agent concentration on the blend morphology, mechanical and rheological properties were investigated. Melt blends of PE/Nylon were prepared with various amount of compatilizer(HDPE-g-MAH) and crosslinking agent using the counter-rotating twin screw extruder. The addition of compatilizer to the various blends resulted in a dramatic decrease in the domain size of the dispersed phase and in a great increase in mechanical properties. It was interest that approximately 5PHR of compatibilizer in the blends were sufficient to reduce the aize of the dispersed phase. But amount of compatibilizer larger than 5PHR yielded the aggregation of the dispersed Nylon phase, possibly due to the clustering phenomenon of compatibilizer. Morphology and mechanical properties of the blends were little influenced by the crosslinking agent in the blends.