A novel macromolecular compatibilizer, styrene-ethylene-propylene-styrene (SEPS) with high content of styrene, was investigated for the purpose of improving the compatibility of PP (polypropylene) /PC (polycarbonate)/POE (ethylene-octene copolymer) blends. SEPS shows a remarkable compatibilizing effect since it has a particular structure with the EP-compatible aliphatic segments, which is well miscible with the nonpolar PP and olefinic elastomer POE domains, and S-chain segments which exhibit strong affinity with PC because of the similar molecular structure. Its compatibilizing effect was examined in terms of the mechanical, morphological, and thermal properties. The compatibilized PP-based blends represent remarkable improvement in impact strength and balanced tensile strength. When 5 wt % SEPS was added to PP/PC/POE blends (20 wt % POE), the impact strength of the blends was enhanced from 24 to 43 kJ/m(2) without obvious drop in the tensile strength. Their morphologies show a decreasing and much more homogeneous size of dispersed PC and POE particles through addition of SEPS, and the fracture surface morphologies change from irregular mosaic to the mix of mosaic and striation, and finally the regularly distant striation. The special morphology structure that resulted from the effect of the compatibilizer could be a key for enhancement of toughness and balanced rigidity of the blends. (c) 2008 Wiley Periodicals, Inc.