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In our current paper the preparation and properties of thermoplastic elastomer produced by dynamic vulcanization is presented and discussed. We dynamically vulcanized natural and styrene butadiene rubber (NR/SBR) phase by continuous extrusion. Dispersion and in-situ vulcanization of the rubber phase occurred simultaneously in a co-rotating twin screw extruder. We used a random polypropylene copolymer (rPP) as the thermoplastic matrix and untreated crumb rubber (CR) to partially substitute the neat fresh rubber in order to check whether this is a potential recycling route for waste rubber products. We studied the effect of various rubber formulations, various processing conditions (screw speed and configuration) and various CR particle size distributions by characterizing the mechanical performance of the thermoplastic dynamic vulcanizates (TDVs) with tensile and hardness tests and their morphology by evaluating SEM micrographs taken from the fracture surfaces of the tensile specimens. The results showed that increasing screw speed and more high-shear elements in the screw setup led to a finer dispersion of the rubber phase, resulting in improved mechanical properties. The ultimate tensile properties of the best TDVs reached 20.5 MPa in tensile strength and 550 % in strain at break. However, partial replacement of the fresh rubber with untreated CR caused a significant deterioration in mechanical properties, due to poor adhesion between the CR particles and the matrix and rubber. This suggests that some kind of pre-treatment (e.g. by microwave or other devulcanization techniques) is necessary to enhance the surface activity of the CR particles.