This works systematically investigates the interfacial properties of the binary and the ternary blends based on polystyrene (PS), ethylene octene copolymer (EOC), and styrene–ethylene–butylene–styrene (SEBS) by analyzing the melt linear rheological behavior of the blends and neat components. Moreover, the relationship between rheology, phase morphology, and mechanical properties of PS/EOC ternary blends with various quantities of SEBS were studied. The surface shear modulus (β) and interfacial tension values obtained by Palierne model indicated that the EOC/SEBS blend has the best interfacial properties, while the lowest interaction was found for PS/EOC blend. Based on the Palierne model and Harkin's spreading coefficients a core–shell type morphology with EOC phase encapsulated by the SEBS shell dispersed in the PS matrix was determined for the ternary blends. Scanning electron microscopy results revealed that both fibrillar and droplet forms of dispersed phase could be developed during the blending of PS and EOC in presence of SEBS. The extent of fibrillar morphology and interfacial interactions in PS/EOC/SEBS ternary blends was dependent on the SEBS content. The improvement of the mechanical properties of PS/EOC blends in the presence of SEBS was evidenced by the tensile and impact resistance experiments. The tensile strength reinforcement was more pronounced for the ternary blends with more fibrillar dispersed phase. © 2019 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2020, 137, 48791.