The dynamic rheological properties of segmented polyurethane based on polycaprolactone diol (PU-PCL diol) and poly (epsilon-caprolactone) (PCL) blends were experimentally examined and theoretically analyzed using Palierne model. PU-PCL diol was melt blended with PCL in three different ratios of 20, 30, and 40%. Initial modeling attempts failed to fit the experimental data of these blends, as the model overpredicted their rheological data. This failure is believed to be due to partial dissolution of PCL in PU. According to our obtained results from differential scanning calorimetry and dynamic thermal mechanical analysis, pure PU-PCL diol is diluted by its homopolymer. By calculating the complex modulus of this diluted matrix using a simple mixing rule and its incorporation into the model, good fitting of the Palierne equation to the experimental data was obtained.