In situ cationic polymerization of bio-based tung oil in the presence of poly(ε-caprolactone), a crystallizable, biodegradable, and biocompatible polymer, was performed to produce novel semi-interpenetrating polymer networks (IPNs). The macromolecular structure and properties of these IPNs were investigated as a function of composition using small amplitude oscillatory shear flow rheology, FT-IR spectroscopy, dynamic mechanical analysis (DMA), differential scanning calorimetry (DSC), thermogravimetric analysis (TGA), and scanning electron microscopy (SEM). This versatile and low-cost strategy successfully produced bio-polymer blends with various degrees of miscibility, morphology, and crystallization behavior. The carbon-carbon double bonds in tung oil were consumed quickly after adding the cationic initiator to form a three-dimensional (3D) crosslinked network in all measured samples as confirmed by FT-IR. A complete miscible structure with a single glass transition temperature and one-phase morphology was observed for a tung oil/PCL 90/10 blend. On the other hand, a two-phase structure exhibiting a nanoscale morphology of the dispersed minor phase as small as 100 nm was observed for blends with 20 and 30 wt% PCL. For a 50 wt% PCL blend, an interconnected, co-continuous microstructure of the two phases was also detected. DMA and DSC measurements confirmed the miscibility (or partial miscibility) of the blends by following the changes in the glass transitions of phases as a function of the composition. The value of the elastic modulus (E′) in the glassy state as obtained from the DMA measurements was strongly dependent on the composition, reaching a maximum at 20 wt% PCL.