Attempts have been made to use different amount of ground tire rubber (GTR) powder as a partial substitute for natural rubber (NR) in thermoplastic elastomer based on linear low-density polyethylene (LLDPE, 60 wt%) and NR (40wt%). Maleic anhydride (MA) and dicumyl peroxide (DCP) were used, during melt mixing of the compound, to modify GTR and vulcanize the rubber phases of the blends. Morphology of the blends was studied by scanning electron microscopy and rheological behavior investigated through rheomechanical spectroscopy. Mechanical properties of the blends were also measured, and the effect of GTR concentration on properties was evaluated. Obtained results showed that modification of GTR with MA and using DCP in the blends containing GTR improves the bonding between GTR and matrix. This leads to a distinctive rheological behavior and enhances tensile strength and elongation at break compared to its corresponding simple blend. It can be said that using of MA and DCP during melt mixing of thermoplastic elastomers based on LLDPE/NR containing GTR, concludes to a better dispersion of GTR and formation of morphology similar to that of a dynamic vulcanized thermoplastic elastomer, which improves interfacial bonding between phases and causes a dramatically increase in mechanical properties. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 115: 2416-2422, 2010