The morphology and physical/mechanical properties of non‐compatibilized and compatibilized blends of poly(ethylene terephthalate) (PET) and polyethylene (HDPE) obtained from virgin and post‐consumer packaging materials were investigated. The blend compatibilization was carried out by melt‐mixing in the presence of various polyolefins functionalized with reactive groups (HDPE‐g‐MA, EPR‐g‐MA, E‐AA, E‐GMA, SEBS‐g‐MA). The effect of the type and concentration of compatibilizer, as well as the mixing conditions on the phase morphology, crystallization behavior, chemical interactions and melt rheology of the blends was then examined by means of electron microscopy (SEM), scanning calorimetry (DSC), FTIR and NMR spectroscopy, and capillary rheometry. The results pointed out that ethylene‐co‐glycidyl methacrylate copolymer (E‐GMA) displayed a higher compatibilizing efficiency giving rise to a neat improvement of phase dispersion and interfacial adhesion in the blends, as compared to the other compatibilizers examined. This was accounted for by a high reactivity of epoxy groups with the chain end‐groups of PET during melt‐mixing and the effect of in situ formed graft copolymer on the interfacial properties (reduction of coalescence, interpenetration with homopolymer phases). Tensile mechanical tests showed that elongation at break of recycled PET/HDPE (75/25) blends was markedly enhanced upon addition of E‐GMA amount lower than 5 wt.‐%.