For use as electrical and electronics parts, or automobile and mechanical parts, toughened poly(phenylene sulfide) (PPS) is desired. For these applications, our. investigation centered on improving the toughness of PPS and developing elastomer-toughened PPS and elastomer-toughened compounds of PPS. Using chemically treated PPS and an olefinic elastomer with a functional group, we developed elastomer-toughened PPS using a reactive processing method. In the PPS matrix, the elastomer is finely dispersed. While the notched Izod impact strength of the original PPS is about 1 kg . cm/cm, elastomer-toughened PPS has a notched impact strength around 50 kg . cm/cm. The notched fracture surface of elastomer-toughened PPS is observed using a scanning electron microscope. We concluded that the mechanism for the toughening is attributed to energy dissipation by matrix yield.