A low energy Ar+ ion-beam was used to modify the surface of a high-density polyethylene (HDPE) dry powder. The modification reaction was promoted by the oxygen gas injected during the irradiation. This simple modification route is characterized as a heterogeneous, solvent-free, environmentally favorable process. The surface functional groups of the modified HDPE were confirmed with X-ray photoelectron spectroscopy and Fourier transform infrared spectroscopy as being various oxygen-containing functional groups. The concentration of the functional groups varied rapidly with the irradiation time, reached a maximum value and then slowly decreased. Because of the low-energy characteristics of the ion beam, the changes in the molecular weight, the melting temperature, and the crystallinity of the modified HDPE were not significant, as evidenced by gel-permeation chromatography and differential scanning calorimetry. The theological behavior of an HDPE/nylon 66 (Ny66) blend, which depends on the blend composition, was complicated due to immiscibility whereas the ion-beam-irradiated HDPE/Ny66 blend showed a more systematic behavior. Also, the compatibility effect of ion-beam-treated HDPE was investigated in the blend of HDPE/Ny66. In the ion-beam-irradiated HDPE/blends, a significant decrease in the domain size of the dispersed phase was observed. Theoretical models were used to estimate the interfacial tension of HDPE/Ny66 blends. The calculated interfacial tension of an ion-beam-treated HDPE/Ny66 blend was less than that of a nontreated HDPE/Ny66 blend, indicating a greater interaction between the ion-beam-treated HDPE and the Ny66 phases. In addition, the mechanical properties of the ion-beam-treated HDPE/Ny66 blend showed a positive deviation from the rule of mixture. Finally, an explanation of the compatibilizing effect of ion-beam-treated HDPE is presented.