We report on the effects of ionic interaction on the electronic structure of PEDOT:PSS where the oxidation state of PEDOT is an import aspect for various applications. Additional ionic interactions are introduced and controlled by varying the fraction of poly(ethylene oxide) (PEO). These interactions are balanced against the inherent cohesive forces within each of the polymers constituting intertwined networks. Raman spectra evidenced a peak-shift as high as ∼14 cm−1 for C[dbnd]C vibrational region which suggested increasing degree of oxidation of PEDOT for higher PEO fractions. Changes to the single and bipolaronic absorption bands support the results from the Raman spectra. For highest PEO fraction neutral-PEDOT and lowered bipolaron density is attributed to localization of PEDOT chains within PEO matrix. Interestingly, for higher PEO fractions the electronic density of states (DOS) of HOMO and core-levels (S2p, C1s and O1s) suggested increased degree of oxidation and electron localization on PEDOT. Near and below (∼12 eV) Fermi level, contribution to the O2p and C2p atomic orbitals depicted significantly different DOS. Also we note energetic shift for O2s/C2s and bonding σCC atomic and molecular DOS, respectively. The correlation between some surface and bulk-related properties suggests the uniformity of the blend material which might be vital for the application in electrochemical devices.