The compatibilizing effect of 50/50 diblock isotactic polystyrene-isotactic polypropylene (iPS-b-iPP), prepared from a sequential block copolymerization of styrene and propylene by using a NdCl3-modified Ziegler-Natta catalyst, was examined in isotactic polystyrene (iPS)-isotactic polypropylene (iPP) blends. As investigated by differential scanning calorimetry (d.s.c.), dynamic mechanical thermal analysis (d.m.t.a.) and scanning electron microscopy (SEM), the thermal properties, dynamic mechanical properties and observed morphologies of the iPS/iPP blend pairs unambiguously support the interfacial activity of the iPS-b-iPP diblock copolymer as both that of a dispersant and an ’anchoring’ compatibilizer. The addition of less than 10% of this diblock copolymer to an iPS/iPP blend has a large compatibilizing effect on its morphology and properties, showing the importance of the adhesion between the components of a noncompatible blend. Not only is the phase size dramatically reduced but also the phase dispersion and the interphase interactions are significantly increased when the compatibilizer is added. Improvements in the mechanical properties of iPS/iPP blends containing compatibilizers have been noted. The addition of the diblock copolymer significantly promotes an enhancement of the tensile strength, elongation at break and Izod impact strength of the iPS/iPP blends. The mechanical properties can be explained by the compatibilizing and anchoring effects of individual diblock copolymer segments with the blend components, which retards mechanically induced slippage in the immiscible iPS/iPP binary blends.