Polypropylene (PP) and Polyethylene (PE) are widely used commodity plastics in packaging industry such as detergent bottles. To produce plastic detergent bottles, very often extrusion blown molded PE-HD as a body and injection molded PP as a screw cap are used. Separation of individual polymer type is difficult due to the similar density. Unfortunately, the melt blending of recycled post-consumer detergent bottle waste leads to deterioration of mechanical properties. Additionally, the percentage of rPP contamination in recycled PE-HD (rPE-HD) from post-consumer bottle waste can be varied depending on local waste composition and different sorting quality. This work investigates the effect of various contamination scenarios with different percentage of rPP from bottle caps in rPE-HD from bottle waste as well as their compatibilization with olefin block copolymer (OBC) on mechanical, thermal, and rheological properties. Moreover, the low temperature tensile properties of blends with OBC are also investigated in this study. The results showed that the increasing rPP contamination leads to deteriorating elongation at break and tensile impact strength. Furthermore, the addition of OBC as a compatibilizer into worse-case contamination scenario (15 wt% rPP in rPE-HD) significantly improved elongation at break and tensile impact strength. Scanning electron microscopy (SEM) confirms the improvement in adhesion between rPP and rPE-HD from recycled bottle waste with the addition of OBC as a compatibilizer. Rheological measurements reveal the interfacial interaction among rPP, rPE-HD and OBC. The low temperature tensile test demonstrated that the addition of OBC as a compatibilizer improved low temperature tensile elongation at break.