Most of the morphology development in compounding of immiscible blends is known to occur at short mixing times. In this investigation, the effect of rheology of the minor component on its tendency to form a continuous phase at short mixing times is studied. It was shown that phase inversion during compounding can occur even with a low-melting major component. Four different blends with polyethylene as the high-melting-point minor component and polycaprolactone as the low-melting-point major component were chosen. Rheological measurements on the individual components were made both in the solid and melt states. Softening temperatures from these measurements were more representative of the observed processing behavior than the peak values as calculated from differential scanning calorimetry data. Compounding runs in a batch intensive mixer indicated that the minor component formed the continuous phase at short mixing times, in the blends with the low viscosity polyethylene, This was shown to correlate with its low modulus in the solid state and its low viscosity in the melt. A ramped temperature protocol during compounding delayed the melting of polyethylene thus preventing phase inversion from occurring. The blends with the higher viscosity polyethylene did not show phase inversion during compounding.