Strain hardening has important roles in understanding material structures and polymer processing methods, such as foaming, film forming, and fiber extruding. A common method to improve strain hardening behavior is to chemically branch polymer structures, which is costly, thus preventing users from controlling the degree of behavior. A smart microfiber blending technology, however, would allow cost-efficient tuning of the degree of strain hardening. In this study, we investigated the effects of compounding polymers with microfibers for both shear and extensional rheological behaviors and characteristics and thus for the final foam morphologies formed by batch physical foaming with carbon dioxide. Extensional rheometry showed that compounding of in situ shrinking microfibers significantly enhanced strain hardening compared to compounding of nonshrinking microfibers. Shear rheometry with linear viscoelastic data showed a greater increase in both the loss and storage modulus in composites with shrinking microfibers than in those with nonshrinking microfibers at low frequencies. The batch physical foaming results demonstrated a greater increase in the cell population density and expansion ratio with in situ shrinking microfibers than with nonshrinking microfibers. The enhancement due to the shrinkage of compounded microfibers decreasing with temperature implies that the strain hardening can be tailored by changing processing conditions.