The effect of incorporating a hydrogenated polybutadiene segment (HPB) in a thermoplastic polyurethane elastomer (TPU) on the compatibility of TPU with a thermoplastic polyurethane elastomer (TPO) was examined. Scanning electron microscopy showed that the particle size of the dispersed phase in the TPU/TPO blends decreased with increasing HPB concentration in TPUs due to the compatibilizing effect of HPB. The crystallization behavior, tensile properties, and rheological properties of the blend also showed that the HPB present in TPUs enhanced the compatibility between TPU and TPO.