Morphological and rheological properties of poly(lactic acid), PLA (semicrystalline and amorphous), and poly(butylene adipate-co-terephthalate), PBAT, and their blends (75 wt%/25 wt%; PLA/PBAT) were investigated in the presence of cellulose nanocrystals (CNCs) prepared from solution casting followed by melt mixing. For the solution casting step, the CNCs were either incorporated into the matrix, the dispersed phase, or both. The dispersion and distribution of the CNCs in the neat polymers and localization in their blends were analyzed via scanning electron microscopy (SEM) and atomic force microscopy (AFM). The highly dispersed CNCs in the solution cast nanocomposites were agglomerated after melt mixing. In the blends with 1 wt% CNCs, the nanoparticles were mostly localized on the surface of the PBAT droplets irrespective of their initial localization. The rheological behavior of the single polymer matrix nanocomposites and their blends was determined in dynamic and transient shear flow in the molten state. Upon melt mixing the complex viscosity and storage modulus of the solution cast nanocomposites decreased markedly due to re-agglomeration of the CNCs. Under shearing at 0.1 s⁻¹, a significant droplet coalescence was observed in the neat blends, but was prevented by the presence of the CNCs at the interface in the blend nanocomposites.