A strategy to reduce the dependence on petroleum-based building blocks and the disposal concerns of solid wastes was proposed by developing a novel polymer blend from bio-based cellulose acetate butyrate (CAB) and poly(trimethylene terephthalate) (PTT). The thermodynamic immiscibility and the thermal behaviors of the polymer melt blends were investigated. The interfacial properties were analyzed to provide the theoretical guidance to improve the compatibility of blends. A reactive compatibilizer, poly(trimethylene terephthalate)-graft-(maleic anhydride) (PTT-g-MA) was prepared from melt reaction and characterized with FTIR. The compatibilizer was melt blended into the CAB and PTT blends. The effects of different compatibilizers on the phase morphologies and mechanical properties of blends were characterized and the interfacial interactions were studied. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 119:2302-2309, 2011