Starch is a carbohydrate polymer that can be found in various crops such as corn, rice or potato. In its native state, starch appears as a semi-crystalline powder. However, when properly plasticized and sheared under heat, e.g. through an extrusion process, starch’s crystalline microstructure can be destroyed leading to an amorphous material called thermoplastic starch (TPS). This material can be processed using conventional polymer processing techniques. TPS is an interesting oxygen barrier but is also very hydrophilic. Polyethylene (PE) on the other side shows a very low water permeability yet is a poor oxygen barrier. The project aims at combining PE and TPS to form a material that is a good barrier both to water and oxygen. This was achieved by blending potato based TPS with polyethylene in a twin-screw extruder with high TPS fractions in order to get a co-continuous blend and then, in a second phase, by using the TPS/PE blend as a core layer in a 3-layer film produced by film blowing. Since TPS and PE boast a very high interfacial tension, a compatibilizer was added. The effect of plasticizer type and content on TPS's rheology in relation with changes in PE viscosity (through different MFIs) and the subsequent morphology development were studied. Blends and films morphologies were determined using Scanning Electron Microscopy. The mechanical, optical and barrier properties of the films were measured. Significant reduction on oxygen permeability was achieved with little or no reduction in film mechanical and optical properties.