Summary: This work is aimed at studying the morphology and the mechanical properties of blends of low density polyethylene (LDPE) and poly(ethylene terephthalate) (PET) (10, 20, and 30 wt.‐% of PET), obtained as both virgin polymers and urban plastic waste, and the effect of a terpolymer of ethylene‐butyl acrylate‐glycidyl methacrylate (EBAGMA) as a compatibilizer. LDPE and PET are blended in a single screw extruder twice; the first extrusion to homogenize the two components, and the second to improve the compatibilization degree when the EBAGMA terpolymer is applied. Scanning electron microscopy (SEM) analysis shows that the fractured surface of both the virgin polymer and the waste binary blends is characterized by a gross phase segregation morphology that leads to the formation of large PET aggregates (10–50 µm). Furthermore, a sharp decrease in the elongation at break and impact strength is observed, which denotes the brittleness of the binary blends. The addition of the EBAGMA terpolymer to the binary LDPE/PET blends reduces the size of the PET inclusions to 1–5 µm with a finer dispersion, as a result of an improvement of the interfacial adhesion strength between LDPE and PET. Consequently, increases of the tensile properties and impact strength are observed.