Polyethylene terephthalate (PET) and polypropylene (PP) are incompatible thermoplastics because of differences in chemical structure and polarity, hence their blends possess inferior mechanical and thermal properties. Compatibilization with a suitable block/graft copolymer is one way to improve the mechanical and thermal properties of the PET/PP blend. In this study, the toughness, dynamic mechanical analysis (DMA), and thermogravimetric analysis (TGA) of PET/PP blends were investigated as a function of different content of styrene-ethylene-butylene-styrene-g-maleic anhydride (SEBS-g-MAH) compatibilizer. PET, PP, and SEBS-g-MAH were melt-blended in a single step using the counter rotating twin screw extruder with compatibilizer concentrations of 0, 5, 10, and 15 phr, respectively. The impact strength of compatibilized blend with 10 phr SEBS-g-MAH increased by 300% compared to the uncompatibilized blend. Scanning electron microscope (SEM) micrographs show that the addition of 10 phr SEBS-g-MAH compatibilizer into the PET/PP blends decreased the particle size of the dispersed PP phase to the minimum level. The improvement of the storage modulus and the decrease in the glass transition temperature of the PET phase indicated an interaction among the blend components. Thermal stability of the PET/PP blends was significantly improved because of the addition of SEBS-g-MAH. J. VINYL ADDIT. TECHNOL., 23:45-54, 2017.