The effect of different catalysts on reactive compatibilization of 50/50 polycarbonate (PC)/polymethylmethacrylate (PMMA) blends achieved via transesterification that occurs during compounding in a twin-screw extruder was investigated on a phenomenological (optical and mechanical properties), mesoscopic (phase morphology), and molecular level (PC-graft(g)-PMMA-copolymer formation and polymer molecular weight degradation). Formation of PC-(g)-PMMA-copolymer by transesterification resulting in transparent mono-phase PC/PMMA blends with obviously improved compatibility of the two polymer constituents requires use of a suitable catalyst. As a side-effect, PC-(g)-PMMA-copolymer formation by transesterification is always accompanied by a significant simultaneous decomposition of the molecular weight (Mw) of the PC. For the first time, a colorless, transparent (mono-phase) PC/PMMA 50/50 blend was achieved by a twin-screw extrusion process that can be easily transferred into industrial scale. To achieve this milestone, 0.05 wt% of a weakly acidic phosphonium salt catalyst had to be applied. As a result of the decrease in Mw of the PC, the mechanical properties (e.g., tensile strain at break and impact strength) of the obtained blends were significantly deteriorated rather than improved as targeted by the polymer compatibilization; therefore, the produced transparent PC/PMMA blends are considered not yet technically suitable for any industrial applications. Different manufacturing process strategies that do not inherently result in PC degradation as a side effect of PC-graft(g)-PMMA-copolymer formation have to be developed to potentially achieve transparent PC/PMMA blends with a useful balance of properties. Based on the experimental observations of this study, a new mechanism of the transesterification reaction occurring during reactive compounding of PC and PMMA in the presence of the effective catalysts is proposed.