In this study, we investigated the compatibilizing effect of poly(hydroxy ether of bisphenol A) (phenoxy) on the immiscible blends of polyamide 6 (PA6) and poly(butylene terephthalate) (PBT). From scanning electron micrographs of PBT/PA6/phenoxy ternary blends, it was found that phenoxy forms encapsulating layer between PA6 and PBT during melt mixing. However, phenoxy does not contribute to reduce the domain size of dispersed phases, even though the encapsulating morphology results from the reduction in interfacial energy by spreading of phenoxy at the interface of PBT and PA6. The storage moduli of PBT/PA6/phenoxy blends slightly increase with phenoxy content below $T_g$ of phenoxy, but the situation is reversed above $T_g$ of phenoxy, indicating that the mechanical properties of polymer blends with encapsulating morphology depend on those of encapsulating polymers. Phenoxy added to PBT/PA6 blends does not significantly improve the tensile, bending, and impact properties of the blends, which calls into question the effectiveness of phenoxy as practical compatibilizers.