A series of thermoplastic elastomers; (TPEs) were prepared from a binary blend of ethylene propylene diene rubber (EPDM) and isotactic polypropylene (iPP) using different types of phase modifiers. The influence of sulphonated EPDM, maleated EPDM, styrene-ethylene-cobutylene-styrene block copolymer, maleated PP, and acrylated PP as phase modifiers showed improved physico-mechanical properties (like maximum stress, elongation at break, moduli, and tension set). Scanning electron and atomic force microscopy studies revealed better morphologies obtained with these phase modified EPDM-iPP blends. The dependence of the phase modifier type and concentration was optimized with respect to the improvement in physical properties and morphology of the blends. Physical properties, dynamic mechanical properties, and morphology of these blends were explained with the help of interaction parameter, melt viscosity, and crystallinity of the blends. Theoretical modeling showed that Kerner, Ishai-Cohen, and Paul models predicted the right morphology-property correlation for the prepared TPEs.