Cryogenic mechanical alloying is used to incorporate a poly(methyl methacrylate-b-isoprene) (MI) diblock copolymer into blends of poly(methyl methacrylate) (PMMA) and polyisoprene (PI). Mechanical milling of the copolymer promotes a reduction in the molar mass of the M block, as discerned from glass transition temperature measurements performed by thermal calorimetry, and induces chemical crosslinking of the I block, as determined from sol-gel analysis. These effects become more pronounced with increasing milling time. Morphological characterization of PMMA-rich PI/MI/PMMA blends by X-ray and electron microscopies reveals that the characteristic size scale of the minority phase decreases with increasing MI content, as well as milling time. The nanostructural features observed in such blends are retained at relatively high MI concentrations during subsequent melt-pressing. Impact testing demonstrates that the blends become tougher upon addition of the MI copolymer, even at relatively low copolymer concentrations. Blend toughness likewise increases with increasing milling time up to a point, beyond which phase inversion occurs within the ternary blends (the PI becomes continuous) and impact strength sharply decreases.