Thermoplastic polypropylene (PP) insulated cables, an alternative to cross-linked polyethylene, offer superior insulation, high operating temperature, recyclability, cost-effectiveness, and a limitless cable length. However, challenges such as brittleness at low temperatures and limited flexibility at room temperature impede the application of PP in the field of cable insulation. To address these issues, in-reactor alloy technology seems to be a promising strategy, creating a multiphase system with intrinsic elastomer dispersion in a homopolypropylene matrix. Most of the research on PP-based multiphase systems focuses on enhancing mechanical properties by controlling microscopic structures. A comprehensive understanding of structural evolution during processing and its correlation with the electrical performance of PP thermoplastic insulation materials remains in its infancy. In this study, PP in-reactor alloys with intrinsic elastomers were utilized as model polymeric materials. A novel technology of "melting extrusion−hot stretching−thermal annealing" was employed to manipulate the elastomer phase morphology and crystalline structure. Severe interfacial mismatch during hot stretching initially compromised the mechanical and electrical properties. After thermal annealing, the mechanical and electrical properties were recovered, arising from the reduced rubber deformation and increased crystalline reorganization. The work presented here is expected to help our understanding of the dependence of electrical and mechanical properties on the microstructure of PP in-reactor alloys, providing a valuable reference for the structural design of cable insulation.