Blends of poly(styrene-co-acylonitrile) (SAN) with ethylene-propylene-diene monomer (EPDM) rubber were investigated. An improved toughness-stiffness balance of the SAN/EPDM blend was obtained when an appropriate amount of acrylonitrile-EPDM-styrene (AES) graft copolymer was added, prepared by grafting EPDM with styrene-acrylonitrile copolymer, and mixed thoroughly with both of the two components of the blend. Morphological observations indicated a finer dispersion of the EPDM particles in the SAN/EPDM/AES blends, and particle size distribution became narrower with increasing amounts of AES. Meanwhile, it was found that the SAN/ EPDM blend having a ratio of 82.5/17.5 by weight was more effective in increasing the impact strength than that of the 90/10 blend. From dynamic mechanic analysis of the blends, the glass-transition temperature of the EPDM-rich phase increased from -53.9 to -46.2degreesC, even -32.0degreesC, for the ratio of 82.5/17.5 blend of SAN/EPDM, whereas that of the SAN-rich phase decreased from 109.2 to 108.6 and 107.5degreesC with the additions of 6 and 10% AES copolymer contents, respectively. It was confirmed that AES graft copolymer is an efficient compatibilizer for SAN/EPDM blend. The compatibilizer plays an important role in connecting two phases and improving the stress transfer in the blends. Certain morphological features such as thin filament connecting and even networking of the dispersed rubber phase may contribute to the overall ductility of the high impact strength of the studied blends. Moreover, its potential to induce a brittle-ductile transition of the glassy SAN matrix is considered to explain the toughening mechanism. (C) 2003 Wiley Periodicals, Inc.