AbstractBisphenol A polycarbonate (BPA‐PC) is an important engineering plastic with unique properties. However, it has some inherent flaws like chemical resistance toward greases and oils. Hence, to improve the chemical resistance the effect of small amounts of polybutylene terephthalate (PBT) functionalized with allyl glycidyl epoxy (AGE) were evaluated. Low amounts of PBT and AGE provided a transparent blend composition with an allyl functionality. Detailed structural analysis by 1H‐NMR showed the addition reaction of AGE‐epoxy with acid end group of PBT, followed by an expected substitution reaction of the modified PBT with BPA‐PC. This unique blend composition exhibited Tg of 131°C and melting temperature (Tm) of 221°C by differential scanning calorimetry (DSC). Further, the microscopy study of blend revealed the stable morphology of PBT domain distributed into PC matrix indicating chemical compatibilization. The mechanical property evaluation of the blend demonstrated an improved flow, an increase in modulus, tensile strength, and higher elongation at break. Thus, a chemical compatible transparent blend of BPA‐PC and PBT with allyl group functionalization has been achieved and first evaluations show slight improvement of chemical resistance toward Banana Boat Sun cream over the BPA‐PC homopolymer.