Polypropylene-liquid crystalline polymer (PP/LCP) and maleic anhydride compatibilized PP/LCP blends were prepared using the extrusion technique followed by injection molding. The LCP employed was Vectra A950 which consists of 25 mol % of 2,6-hydroxynaphthoic acid and 75 mol % of p-hydroxybenzoic acid. The rheology, morphology, and impact behavior of compatibilized PP/LCP blends were investigated. The rheological measurements showed that the viscosity of LCP is significantly higher than that of the PP at 280℃. This implied that the viscosity ratio of the LCP to the polymer matrix is much larger than unity. Scanning electron microscopy (SEM) observations revealed that the LCP domains are dispersed mainly into elongated ellipsoids in the PP/LCP blends. However, fine fibrils with large aspect ratios were formed in the compatibilized PP/LCP blends containing LCP content ≥ 10 wt %. The development of fine fibrillar morphology in the compatibilized PP/LCP blends had a large influence on the mechanical properties. The Izod impact strength of the PP/LCP blends showed little dependence on the LCP concentrations. On the other hand, the impact strength of the compatibilized PP/LCP blends was dependent on the LCP concentrations. The correlation between the LCP fibrillar morphology and spherulitic structure with the impact properties of the compatibilized PP/LCP blends is discussed.