The in situ compatibilization process between polystyrene (PS) and polybutylene terephthalate (pBT) is carried out by adding three types of hydroxy functionalized polystyrenes (PS-Fs). The PS-F was used to promote the in situ copolymerization reaction and compatibilization during melt blending in the mixer. The results of different characterization techniques including Fourier transform infrared (FTIR), GPC and the differential scanning calorimetry (DSC) demonstrate that the slow alcoholysis reaction between the PS-F and PET took place after the 60 min thermal treatment. In order to achieve good mechanical properties of the reactive blends of PS-F and PET, it is important to control the level of degradation of PET. On the other hand, the optimum degradation is necessary to promote the in situ reaction to the PS-F. In this paper titanium butoxide (TNBT) and triphenyl phosphite (TPP) were used in order to control the reaction and degradation. The addition of 1% TNBT into the blends of PS-F/PBT enhances the miscibility of the PS-F and PET as a catalyst for the alcoholysis reaction. It is found that the stabilizer TPP not only prevents the excess thermal degradation of PET but also promotes the reaction between the PS-Fs and PET by coupling reaction. The anionic polymerization procedure of three different PS-Fs and the characterization results of the reaction between PS-Fs and PET are described. (C) 2001 Elsevier Science Ltd. All rights reserved.