The localization of multi‐walled carbon nanotubes (MWCNTs) in immiscible polymer blends composed of polycarbonate (PC) and poly(ethylene terephthalate) (PET) is studied. Although partial miscibility is confirmed for the blend, presumably owing to the transesterification reaction, the MWCNT addition is found to have no influence on the miscibility. Moreover, morphological investigation and solvent extraction experiments reveal that MWCNTs are preferentially localized in PET phase. Thermal behavior demonstrates that MWCNTs act as an effective nucleating agent for PET, leading to the increment in crystallization temperature and crystallinity of PET. Tensile properties of PC/PET blends, i.e., Young's modulus, yield strength, and ultimate strength, are significantly improved by the addition of MWCNTs. POLYM. COMPOS., 38:1103–1111, 2017. © 2015 Society of Plastics Engineers