To observe the effect of ENGAGE (a poly‐olefin elastomer) on compatibilization of industrially important incompatible blend, high‐density polyethylene (HDPE)/ethylene‐propylene diene elastomer (EPDM), 15 wt % ENGAGE is incorporated into the system and the latter is found satisfactorily efficient as compatibilizer for the above system. To improve some industrially pertinent properties another strategies are also followed in addition, incorporation of magnesium hydroxide [Mg(OH)2] and electron beam (EB) crosslinking into the system. The gel content was found to increase with radiation dose, EPDM content and Mg(OH)2 dispersion. ENGAGE interestingly increases the gel content that is, promotes crosslinking. It is unique that filler dispersion and crosslinked network formation maintain the compatibility of the ternary system, which is confirmed by X‐ray diffraction, differential scanning calorimetry, mechanical properties, and scanning electron microscope. The compatibilization, Mg(OH)2 dispersion, and EB crosslinking improve the mechanical, thermo mechanical, flame retardant properties, and phase morphology considerably. © 2017 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2017, 134, 44922.