The compatibility of melt-mixed blends of a partially neutralized poly(ethylene-co-methacrylic acid-co-isobutyl acrylate) Zn2+ ionomer with a polyester-type polyurethane (PU), reported in Part 1 of this work, allowed application of the ionomer as a compatibilizer for incompatible PU/high-density polyethylene (HDPE) blends. The techniques applied were dynamic mechanical analysis (d.m.a.), tensile testing, differential scanning calorimetry and scanning electron microscopy (SEM) of cryofractured surfaces. Once optimization of mixing conditions was established, various composition parameters were examined such as PU/HDPE ratio and compatibilizer content. Blend performance was assessed by means of tensile testing and d.m.a., while morphology was studied mainly by SEM and indirectly by large- and small-deformation behaviour. Although all ternaries studied at ionomer contents of ca. 15 wt% had a satisfactory level of ultimate tensile properties, the PU-rich polymeric alloys performed best.