Ternary blends of PS and PMMA in a PE matrix were prepared by twin-screw extrusion to investigate the core/shell encapsulation phenomenon in the composite droplet. The PS was found to encapsulate the PMMA to form composite droplets within the PE matrix as expected from the spreading coefficient theory. The effects of dispersed phase concentration, viscosity ratio, feeding sequence and twin-screw operating conditions were investigated. The blend morphology was observed by scanning electron microscopy after selective extraction of either PS or PMMA, and average core and composite droplet diameters were determined by image analysis. Although it is known that the structure of composite droplet blends can be substantially altered through control of the volume fraction of the components in the dispersed phase, this study demonstrates that blends with a 1: 1 composite droplet volume fraction are relatively stable to large variations in the minor phase viscosities and processing conditions. Twin-screw extrusion thus provides a highly robust technique for the melt processing of blends possessing composite droplet morphologies. (C) 2004 Society of Plastics Engineers.