The mechanical behavior of chlorinated polyethylene (CPE)-modified poly(vinyl chloride) (PVC) has been determined. The nature of the irreversible deformation processes which are responsible for mechanical energy absorption has been investigated by optical and electron microscopic techniques. Addition of CPE results in a decrease in the shear band initiation stress and an increase in void density and stability. The crazing to shear banding transition is observed at a blend composition between 2 and 7 percent CPE at the strain rate employed. It has been established that voiding occurs in the CPE rubber phase. Voiding accounts for at least part of the increased energy absorption of the blend. The stability of the voids to coalescence and fracture is attributed to strong adherence of the CPE to the primary PVC particles.