The effects of the compatibilizer, styrene maleic anhydride (SMA-8% MA) upon the change of morphology and molecular dynamics of polyamide-6 (PA6) and poly (2,6-dimethyl-1,4-phenylene oxide) (PPO) blends were investigated by means of solid-state NMR techniques. With increasing amounts of SMA, the domains correspond to PA6 and PPO are reduced and the polymer segmental mobility increased. The correlation between NMR relaxation time, T-1p(H), and the bulk mechanical properties provide a molecular level understanding of the modification of molecular dynamics by the compatibilizer (SMA). The correlation shows that the tensile strength is governed mainly by the morphology, but modulated by the PA6 crystallinity, while the tensile elongation and impact strength are closely affected by both the molecular mobility and morphology. The annealing process improved only the tensile strength, but deteriorated tensile elongation and impact strength due to the increase of PA6 crystallinity, which induced phase separation after annealing. This study raised an important point that the polymer mechanical properties are most sensitive to the molecular structure and dynamics take place within the range of 20 Angstrom to few hundred Angstrom.