Halloysite nanotubes (HNTs) have been successfully modified using polyethyleneimine (PEI). HNTs and PEI-modified HNTs-filled 80/20 (wt/wt) polypropylene (PP)/acrylonitrile butadiene styrene (ABS) blends and its nanocomposites in the presence of dual compatibilizer have been prepared by melt mixing technique. The refinement in matrix-droplet morphology, selective localization of PEI-modified HNTs, increase in crystallinity of PP phase, formation of -form of PP crystals and improved dispersion of PEI-modified HNTs in PP phase has resulted in a remarkable improvement in tensile modulus, impact strength and thermal stability of PEI-modified HNTs-filled 80/20 (wt/wt) PP/ABS blends in presence of dual compatibilizer. The increase in tensile modulus, tensile strength and impact strength for PEI-modified HNTs-filled 80/20 (wt/wt) PP/ABS blends in presence of dual compatibilizer are 28.8, 26.6 and 38.5%, respectively.