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In the case of thermoplastic elastomers (TPEs) based on nonpolar polypropylene (PP) and polar rubbers, a small quantity of a third component known as the compatibilizer is added to maximize the compatibility between the incompatible blend components. Generally, one part of the compatibilizer reacts with the nonpolar PP phase and the other part of the compatibilizer reacts with the polar rubber phase, which in turn produces TPEs with useful properties. Till today, there have been no reports in the literature that examine the effect of a compatibilizer that can have multifaceted interactions with the incompatible blend components for the development of TPEs with unique properties. Accordingly, here, an ethylene-acrylic ester-maleic anhydride terpolymer (E-AE-MA-TP) has been used as the compatibilizer for the preparation of TPEs based on nonpolar isotactic polypropylene (i-PP) and polar epichlorohydrin rubber (ECR). The E-AE-MA-TP compatibilizer contains ethylene groups, acrylic groups, and anhydride/acid groups along its backbone, which act as the sites for establishing multifaceted interactions with both i-PP and ECR. The compatibilization efficiency of the E-AE-MA-TP compatibilizer has been analyzed by contact angle measurements, Fourier transform infrared (FTIR) spectroscopy, tensile stress−strain studies, mixing torque profiles, rheological studies, differential scanning calorimetry (DSC), field emission scanning electron microscopy (FESEM), and atomic force microscopy (AFM) images. The particle size of the dispersed ECR domains in the i-PP matrix of the i-PP/ECR blend prominently decreases (∼90% reduction) by incorporation of a very low dosage (5 wt %) of the E-AE-MA-TP compatibilizer. The i-PP/ECR (40 wt %/60 wt %) blend containing 5 wt % compatibilizer displays outstanding mechanical properties (especially strain at break value (∼370%)), which are superior to the mechanical properties of several compatibilized TPEs (based on PP and polar rubbers) reported in the literature. The unique properties of TPEs based on i-PP and ECR in the presence of the E-AE-MA-TP compatibilizer is attributed to the efficacy of the E-AE-MA-TP compatibilizer to establish multifaceted interactions with both i-PP and ECR.