Phase morphology and mechanical properties of ternary blends consisting of PS (polystyrene), SBR (styrene butadiene rubber) and different polyolefins (POs) have been studied. PS, systematically forms the matrix, SBR and PO being combined in the dispersed phase. Although POs of various melt viscosity and stiffness are used, the binary (SBR/PO) dispersed phase is of a core-shell structure, in which PO forms the core. Upon increasing the viscosity of PO, the average size of the cores and the SBR domains including them increases. Comparison of the experimental shear storage modulus of the blends with theoretical predictions indicates that the stress transfer from the PS matrix to the PO core through the SBR shell depends on the modulus of the SBR envelope. The ultimate mechanical properties of the ternary blends are sensitive to the stiffness of the PO core. (C) 2000 Elsevier Science Ltd. All rights reserved.