Compatible blends of nonreactive thermoplastic fluoropolymer, poly(vinylidene fluoride) (PVDF) and thermoplastic polyurethane (TPU) at 70/30 weight ratio, were prepared by utilizing the unique structural feature of reduced graphene oxide (RGO). Here, RGO acts as a compatibilizer as well as a reinforcing filler. RGO interacts with both polymers and reduces the interfacial tension between them, leading to compatibilization. RGO content in the blends was varied from 0 to 0.5 wt %, and the best result was found at 0.3 wt % loading. Excellent compatibilization between PVDF and TPU was established by mechanical, morphological, and thermal property studies. Chemical interaction between the RGO/TPU and RGO/PVDF was proved by FTIR-ATR study. With the incorporation of 0.3 wt % RGO, tensile strength, Izod impact strength, and elongation at break of the blend were increased by 42%, 83%, and 43%, respectively. FESEM and AFM images of blends without loading of filler after etching out of TPU phase show nonuniformly distributed hole morphology. RGO-containing blend has shown much finer and uniformly distributed holes that confirm improved compatibility between the two incompatible polymers. RGO also improves the thermal stability of the compatible blends considerably. At 0.3 wt % loading, the onset of thermal degradation increased by about 10 C.