Commercially available recycled polypropylene (R-PP) and recycled bottle grade polyethylene terephthalate (R-PET) were melt compounded in different proportions of R-PET in twin screw extruder at temperatures used typically for PP processing. The melt flow behaviour was investigated for these blends using capillary rheometer at different temperatures viz. 230, 250, 260°C. The crystallization and structure development was studied using DSC and XRD. The melt viscosity (η) of these blends followed the usual non-Newtonian behaviour with decrease of η with high shear rate (γ′) and saturation at low shear rate. Most noteworthy finding was that the low shear viscosity at melt temperatures of 230 and 250 showed a peak with increase of R-PET content while at 260°C there was uniform decrease in the viscosity with addition of R-PET. The high shear viscosity also showed similar trend but with less pronounced changes. This was attributed to the cross over of domain shape from spherical to ellipsoidal and finally fibrous shape according to Utracki model. At the melt compounding/processing temperature of 230°C, the R-PET phase was in semi solid state and hence it formed fibrous morphology in the PP melt which was confirmed by SEM analysis. The most interesting finding was that crystallization of both the component polymers was affected due to the presence of the other. R-PP showed nucleation effect in presence of R-PET with the shift in Tc from 118°C to higher temperature side (123°C). Even R-PET exhibited shift in the Tc from 178°C to 201°C in presence of R-PP. These results are discussed in terms of nucleation and slow heat dissipation for PET domain in PP melt together with shear induced crystallization. These structural modifications in the R-PP/R-PET blends led to improvement in properties at certain compositions processed under certain conditions.