The influence of interfacial adhesion on the impact toughness of poly(vinyl chloride) (PVC)-nitrile rubber (NBR) blends with the morphology of well-dispersed rubber particles has been investigated. The blend containing NBR 18 (NBR with 18 wt% acrylonitrile (AN)) has medium interfacial adhesion strength, and exhibits a brittle-ductile transition at a critical matrix ligament thickness T-c = 0.059 mu m while the blend containing NBR 26 (NBR with 26 wt% AN) and having stronger interfacial adhesion exhibits the transition at T-c = 0.041 mu m. The difference can be understood in terms of the deformation mechanisms. Debonding at the interface of the PVC-NBR 18 blend takes place upon impact, and this induces shear yielding of the matrix. For the PVC-NBR 26 blend, however, no microvoid is formed, so the occurrence of matrix shear yielding is delayed. In the investigated rubber particle size range (0.04 - 0.12 mu m), debonding followed by matrix shear yielding is a much more important toughening mechanism than internal cavitation of rubber particles.