Abstract The interface between cellulose nanocrystals (CNCs) in thermoplastic matrices is one of the most important issues prohibiting the development of CNC-based polymeric composites prepared via melt processing. In the present work, polyethylene oxide (PEO) was used as a compatibilizer to enhance the interface with a polyethylene matrix. It was found that the composites produced using a PEO compatibilizer possess better overall mechanical properties and a higher degree of crystallinity of the polyethylene than the unmodified samples. An increase in both the tensile strength and modulus of the composites was observed for up to 1.5 wt.% of CNCs; beyond this point no significant increases were observed. When CNCs were added (up to 1.5 wt.%) to the matrix, the crystallization peak of the composites in the DSC thermograms shifted to higher temperatures. The stress-transfer process in the composites was monitored using Raman spectroscopy. Higher Raman band shift rates with respect to tensile strain of a peak corresponding to main chain molecular deformation were observed for the composites produced using the PEO compatibilizer. This demonstrates that stress is transferred from the matrix to the fillers more effectively with the presence of PEO. The simple PEO-modification approach adopted in this study avoids the classical solvent method of production of CNC-based nanocomposites which is not really applicable at an industrial scale.