The effects of compatibilization on the toughening of polypropylene (PP) by melt blending with styrene/ ethylene-butylene/styrene tri-block copolymer (SEBS) in a twin-screw extruder were investigated. The compatibilizers used were SEBS functionalized with maleic anhydride (SEBS-g-MA), PP functionalized with acrylic acid (PP-g-AA), and bifunctional compound p-phenylenediamine (PPD). The effects of the compatibilization were evaluated through the mechanical properties as well as through the determination of the phase morphology of the blends by scanning electron microscopy. Reactive compatibilized blends show up to a 30-fold increase in impact strength compared with neat PP; likely the result of the reaction of the bifunctional compound (PPD) with the acid acrylic and maleic anhydride groups, this increase in strength rendered both morphological and mechanical stability to these blends. The addition of PPD to the blends significantly changed their phase morphologies, leading to larger average diameters of the dispersed particles, probably as a result of the morphological stabilization at the initial processing steps during extrusion, with the occurrence of chemical reactions.