The ethylene-co-glycidyl methacrylate (EC) copolymer is an efficient reactive compatibilizer for polymer blends of poly(butylene terephthalate) (PET) and polypropylene (PP). During melt processing, the epoxy functional group of the EG copolymer can react with the PET carboxylic acid and/or hydroxyl terminal groups at the interface to form various EG-g-PBT copolymers. These in situ formed grafted copolymers tend to concentrate along the interface to reduce the interfacial tension at the melt and result in finer phase domains. Higher glycidyl methacrylate (GMA) content in the EG copolymer or a higher quantity of the EG compatibilizer in the blend results in a better compatibilized blend in terms of finer phase domains, higher viscosity, and better mechanical properties. The presence of only 50 ppm catalyst (ethyltriphenyl phosphonium bromide)in the EG compatibilized blend further improves the blend compatibility substantially.