Blends of High Impact Polystyrene (HIPS) and High Density Polyethylene (HDPE) with different compositions were prepared by extrusion using Styrene-Butadene -Styrene (SBS) block copolymer as a compatibilizer. SEM micrographs of the fracture surface of blends showed that all binary and compatibilized blends containing 20 to 60 wt.% HIPS have matrix-dispersed morphologies with HDPE as the matrix. It was found that the addition of compatibilizer leads to smaller domain sizes and finer morphologies in all blends. Although at 60 wt.% HIPS, some extent of co-continuity was observed, at higher HIPS contents phase inversion occurred. As an example, in the 80/20 HIPS/HDPE system, large domains of HDPE were observed in HIPS which were then reduced in size after the addition of compatibilizer. TEM micrographs showed a salami structure for neat HIPS and HIPS/HDPE binary blends. It was found that in compatibilized blends containing 5 wt.% SBS, some compatibilizer particles were spread in the PS matrix, but in blends with higher amounts of SBS (15 wt.%), most of SBS particles were located in the interface between HIPS and HDPE which leaded to increase of interfacial adhesion between the two polymers. DMTA results showed that the peak in the tan delta curve of HDPE, disappeared by blending it with HIPS. This could be attributed to the location of HDPE in the salami particles of HIPS. This phenomenon was confirmed by TEM images which showed larger salami particles in HIPS/HDPE in comparison with neat HIPS.