The melt-blending method was applied to prepare ternary composites of polypropylene (PP), organic rectorite (OREC), and poly(ethylene octene) elastomer (POE) with a constant content of 2 phr (parts per hundred parts of PP) OREC and 5 or 15 phr POE (PRE25 and PRE215, respectively). At the same time, OREC/PP binary composites with a 2 phr loading of OREC (PR2) and POE/PP systems with 5 or 15 phr POE (E5 and E15, respectively) were prepared to investigate synergistic effects of OREC and POE. Scanning electron microscopy was used to study the distribution of OREC and POE in the matrix, X-ray diffraction (XRD) and transmission electron microscopy were used to investigate the intercalation performance of OREC in the composites, and polarized light microscopy (PLM) was used to observe the crystallization form and crystallite size. The mechanical properties and dynamic mechanical analysis were also measured. The PRE composites exhibited a multiphase structure, that is, a spherical texture of POE, a plate of clay, and a continuous phase of PP; a larger content of POE produced a larger size, a broader distribution of the spherical phase, and a better intercalation performance of the clay. The E systems were binary phases, that is, a spherical texture of POE and a continuous phase of PP. The crystallite size of the PRE composites was finer than that of pure PP according to XRD data, and this was confirmed by PLM. The impact strength and tensile elongation at break of the PRE composites increased dramatically in comparison with those of the PP, PR2, and corresponding E systems, and this indicated that POE and OREC had synergistic toughening and strengthening effects on PP. The storage modulus of PRE was higher than that of pure PP and lower than that of PR2. There were two glass-transition temperatures in the PRE systems according to the curve of tan 5; they represented those of pure PP and POE, respectively, and indicated that the PRE systems were physical mixtures. (C) 2005 Wiley Periodicals, Inc.