Toughening of recycled poly(ethylene terephthalate) (PET) was carried out by blending with a maleic anhydride grafted styrene-ethylene/butylene-styrene triblock copolymer (SEBS-g-MA). With 30 wt% of the SEBS-g-MA, the notched Izod impact strength of the recycled PET was improved by more than 10-fold. SEM micrographs indicated that cavitation occurred in just a small area near the notch root. Addition of 0.2 phr of a tetrafunctional epoxy monomer increased the recycled PET melt viscosity by chain extension reaction. Different from the positive effect of the epoxy monomer in toughening of nylon and PBT with elastomers, the use of the epoxy monomer in the recycled PET/SEBS-g-MA blends failed to further enhance dispersion quality and thus notched impact strength. This negative effect of the epoxy monomer was attributed to the faster reactivity of the epoxy group with maleic anhydride of the SEBS-g-MA than with the carboxyl or hydroxyl group of recycled PET. (C) 2004 Wiley Periodicals, Inc.