Ternary-blended, melt-blown films of polylactide (PLA), polycaprolactone (PCL) and cellulose acetate butyrate (CAB) were prepared from preliminary miscibility data using a rapid screening method and optical ternary phase diagram (presented as clear, translucent, and opaque regions) as a guide for the composition selection. The compositions that provided optically clear regions were selected for melt blending. The ternary (PLA/PCL/CAB) blends were first melt-extruded and then melt-blown to form films and characterized for their tensile properties, tensile fractured-surface morphology, miscibility, crystallinity, molecular weight and chemical structure. The results showed that the tensile elongation at the break (%elongation) of the ternary-blended, melt-blown films (85/5/10, 75/10/15, 60/15/25 of PLA/PCL/CAB) was substantially higher (>350%) than pure PLA (ca. 20%). The range of compositions in which a significant increase in %elongation was observed at 55–85% w/w PLA, 5–20% w/w PCL and 10–25% w/w CAB. Films with high %elongation all showed good interfacial interactions between the dispersed phase (PCL and CAB) and matrix (PLA) in FE-SEM and showed improvements in miscibility (higher intermolecular interaction and mixing) and a decrease in the glass transition temperature, when compared to the low %elongation films. The decrease in M_w and M_n and the formation of the new NMR peaks (¹H NMR at 3.68–3.73 ppm and ¹³C NMR at 58.54 ppm) were observed in only the high %elongation films. These are expected to be in situ compatibilizers that are generated during the melt processing, mostly by chain scission. In addition, mathematical modelling was used to study the optimal ratio and cost-effectiveness of blends with optimised mechanical properties. These ternary-blended, melt-blown films have the potential for use in both packaging and medical devices with excellent mechanical performance as well as inherent economic and environmental capabilities.