This article reveals that the already known improved properties of the thermoplastic-liquid crystalline polymer (LCP) blends can be further improved substantially over the corresponding noncompatibilized counterparts by using a reactive in situ type compatibilizer, the styrene-glycidyl methacrylate (SG) copolymer. This SG copolymer has been demonstrated in this article to be an effective reactive compatibilizer to improve the processability, heat deflection temperature, and mechanical properties of Noryl/LCP blends. The epoxy functional groups of the SG copolymer can react with the end groups of PPO (in Noryl) and LCP. The in situ-formed SG-g-LCP copolymer tends to reside along the interface of Noryl-LCP and reduces the interfacial tension during melt processing. The resultant LCP fibers in the Noryl matrix of the compatibilized blends have a higher aspect ratio because the fibers become finer, longer, and tend to form lamellate domains with a greater interphase contact area than those from the noncompatibilized blends. The compatibilized blends also improve the interphase adhesion between Noryl and LCP. The presence of ethyl triphenylphosphonium bromide catalyst promotes the grafting reaction to improve blend compatibilization.