The relationship between mechanical properties and phase morphology of blends of polyamide6 (PA6) and polycarbonate (PC) compatibilized with a maleic anhydride functionalized poly[styrene-b-(ethylene-co-butylene)-b-styrene] triblock copolymer (SEBS-gMA) were explored. The in situ chemical reaction between the maleic anhydride of SEES and the amine end group of PA6 during melt mixing induces the encapsulation of SEBS-gMA on the PC domains in PA6 rich blends. Through this phase formation, the adhesion on the domain boundary between PA6 and PC are improved and thus mechanical properties are improved. The use of the combination of SEBS-gMA and unfunctionalized SEES as compatibilizers has been found to provide remarkable improvement of mechanical properties in the PA6/PC blends. A transmission electron microscope (TEM) study has revealed that the encapsulation of SEBS around the PC domains becomes gradually incomplete by the use of both SEBS-gMA and unfunctionalized SEES in the PA6 rich blends and at the same time the dispersed SEES domains in the PA6 matrix enlarge with increasing the ratio of unfunctionalized SEES to SEBS-gMA. In addition, the SEES phase encapsulating the PC domains become thicker accompanying with the incompletion of the encapsulation. Although the encapsulation is incomplete, maximum impact strength and maximum strain at break in tensile test can be obtained when certain combinations of SEBS-gMA and SEES are used. The observation of the domain boundary TEM has revealed that the thicker SEES phase on the domain boundary contains the micro domain structure of SEES, where the polystyrene phase forms a cylinder in a hexagonal arrangement in the poly(ethylene-co-butylene) matrix. Through this micro domain structure, SEES is assumed to perform as a thermoplastic elastomer and toughen the domain boundary between PA6 and PC.