Three different biodegradable polyesters, namely, polycaprolactone (PCL), polybutylene succinate (BIONOLLE), and a copolyester of adipic acid, terephthalic acid, and 1,4‐butanediol (EASTAR) were melt‐blended using a twin‐screw extruder. The percentage composition of each of the aforementioned polymers was varied to obtain different blends, and the mechanical properties were evaluated. Selected blends showed significant improvement in tensile strength as compared with the individual polymers used to prepare the blend. The compatibility between the polymer phases was examined via Fourier transform infrared (FTIR) and nuclear magnetic resonace (NMR) spectroscopy as well as dynamic mechanical analysis. FTIR and NMR data confirmed the occurrence of hydrogen‐bonding and ester‐interchange reactions. Thermal properties and changes in crystallinity of the blends were examined with differential scanning calorimetry and X‐ray diffraction. A considerable increase in crystallinity was shown by the blend system containing BIONOLLE/PCL. The morphology of the blends was observed and correlated to the improved mechanical properties of the blend system. Results revealed an intermediate multiphase system in which a significant degree of mixing was achieved through the chemical interaction of the functional groups present, while using the twin‐screw extruder. Significant improvement in mechanical properties of some blends was observed, and information about the miscibility of these polyesters is provided. © 2002 Wiley Periodicals, Inc. J Polym Sci Part A: Polym Chem 40: 2003–2014, 2002