Low molecular weight Hydroxyl-Terminated-Polybutadiene (HTPB) and Glycidyl Azide Polymer (GAP) are completely immiscible. These pre-polymers were compatibilized by allowing the slow reacting GAP hydroxyls to react first with toluenediisocyanate (TDI) and only then adding HTPB with relatively fast reacting hydroxyls. The two stage procedure yielded a macroscopically homogenous rubber. The rubber is composed of cross-linked HTPB continuum scattered with 1-10 mu m non-bonded GAP droplets. The droplet material was identified using Infra-Red (IR), Gel Permeation Chromatography (GPC) and Differential Scanning Calorimetry (DSC) analyses before and after extraction of the rubber. Dynamic Mechanical Analysis (DMA) was used for assessing the effect equivalent ratio ([NCO]/[OH]), composition (% GAP in the rubber) and reaction time (GAP/TDI 1st stage) have on the rubber properties. We have concluded that the large difference in the condensation rate of GAP hydroxyls versus HTPB hydroxyls with TDI (k(HTPB)/k(GAP) = 3.7@65 degrees C) is responsible for in situ formation of surface active species as GAP-b- (HTPB)(n) or GAP-g-(HTPB)(n) n = 1, which enables compatibilization of the immiscible polymers. The formation of the postulated species is also supported by GPC analysis. This simple two step procedure eliminated the need to prepare a pre-made co-polymer or introduce appropriate functional groups on one or both component to achieve surface reaction and compatibilization. (c) 2018 Elsevier Ltd. All rights reserved.