The miscibility and phase behavior of two stereoisomer forms of poly(lactide) (PLA: poly (L-lactide) (PLLA) and poly(DL-lactide) (PDLLA)) blends with poly(epsilon-caprolactone)-b-poly(ethylene glycol) (PCL-b-PEG) and PCL-b-monomethoxy-PEG (PCL-b-MPEG) block copolymers have been investigated by differential scanning calorimetry (DSC). The DSC thermal behavior of both the blend systems revealed that PLA is miscible with the PEG segment phase of PCL-b-(M)PEG but is still immiscible with its PCL segment phase although PCL was block-copolymerized with PEG. On the basis of these results, PCL-b-PEG was added as a compatibilizer to PLA/PCL binary blends. The improvement in mechanical properties of PLA/PCL blends was achieved as anticipated upon the addition of PCL-b-PEG. In addition, atomic force microscopy (AFM) measurements have been performed in order to study the compositional synergism to be observed in mechanical tests. AFM observations of the morphological dependency on blend composition indicate that PLA/PCL blends are immiscible but compatible to some extent and that synergism of compatibilizing may be maximized in the compositional blend ratio before apparent phase separation and coarsening.