Despite various physical and chemical strategies that have been explored, compatibilization of polymer blends has proved elusive. Confinement of polymers has shown to induce substantial and at times unexpected changes in glass-transition temperature, dynamics, and morphology of these materials. Although confinement of blends to thin films have shown to influence phase separation structure and chain mobility, the impact of confinement on the miscibility of polymer mixtures is much less understood. Here, we present a computational study using field-theoretic simulations to understand the thermodynamics of polymer blends that are confined in the interstices of nanoparticle packings where both polymers have neutral interactions with the nanoparticle surfaces. We calculate their binodal phase envelopes and show that two polymers that would undergo macroscopic phase separation become miscible when they are subjected to extreme nanoconfinement. The strength of the repulsion required to induce phase separation increases significantly as confinement increases. We find that this enhanced miscibility is driven by both an increase in entropic penalty upon phase separation and a decrease in enthalpic repulsion with increasing confinement. We relate the change in enthalpy to a reduction in the number of polymer–polymer contacts near nanoparticle surfaces and the change in entropy to a reduction in conformational freedom due to the formation of a polymer–polymer interface near nanoparticle surfaces. Confinement-induced mixing of polymers in nanoparticle packings could enable precise tuning of mechanical and transport properties of nanocomposite films and membranes.