Molecular modeling simulations are the most important tools to predict blend compatibility of polymers that are otherwise difficult to predict by experimental means. Conflicting reports have been reported on the blend compatibility of poly(vinyl alcohol), PVA, and chitosan, CS polymers. Since both the polymers are widely used in pharmaceutics as drug-loaded particulates and as separation membranes, we felt it necessary to investigate their compatibility over the practical range of compositions. In this paper, we attempt to study the compatibility of PVA and CS polymers using molecular modeling strategies to understand the interactions between CS and PVA polymers to predict their compatibility from atomistic simulations. Flory-Huggins interaction parameter, chi, was computed at 298 K to assess the blend compatibility at different ratios of the component polymers. Miscibility was observed for blends below 50% of PVA, while immiscibility was prevalent at compositions between 50 and 90% PVA. Computed results confirmed the experimental findings of dynamic mechanical thermal analysis, suggesting the validity of modeling strategies employed. Plots of Hildebrand solubility parameter and cohesive energy density calculated at 298 K supported these findings. The chi values for blends, which satisfied the criteria of miscibility of polymers computed by atomistic simulations, agreed with the solubility criteria related to order parameters calculated from mesoscopic simulations. Miscibility between PVA and CS polymers is attributed to hydrogen bond formation and to an understanding of which of the interacting groups of CS, i.e., -CH2OH or -NH2, are responsible in blend miscibility. This was further confirmed by molecular dynamics simulations of radial distribution functions for groups or atoms that are tentatively involved in interactions. These results are correlated well to obtain more realistic information about interactions involved as a function of blend composition. Computed free-energy from the mesoscopic simulation for blends reached equilibrium, particularly when the simulation was performed at higher time step, indicating stability of the blend system at certain compositions.