The miscibility and optical properties of polyvinylchloride (PVC) blends with different concentration of polyethylene oxide (PEO) have been studied. FTIR spectroscopy studies show the presence of interactions between blend constituents. The optical properties in the UV-visible regions are investigated at room temperature. From absorption spectra in UV-visible regions, the dependence of the absorption coefficient on the photon energy suggests the presence of both direct and indirect allowed transitions in k-space. The values of the optical band gap (Eopt) for both transitions have been obtained. The width of the tail of localized states in the band gap (Eu) was evaluated using the Urbach-edges. Both the parameters (Eopt) and (Eu) vary with different PEO content.