The mechanical properties and phase microstructure of ternary phase polypropylene composites have been investigated using combinations of rigid glass beads and ethylene/propylene rubber (EPR) modifiers. Particular consideration has been given to the relative interaction between these components and their dispersion within the composite. In this regard, EPR and untreated glass beads existed as independent phases, whereas EPR functionalized with maleic anhydride showed a tendency to encapsulate the inorganic phase. As a consequence, marked differences in mechanical, properties, in particular toughness, were exhibited by these systems, manifested by changes in failure mechanism. Structure in these composites was explored by Fourier transform infrared spectroscopy, dynamic mechanical analysis, and scanning electron microscopy.