Physical characterization of a commercial polyolefinic thermoplastic elastomer (TPE), Santoprene(R), was undertaken to understand the elastomeric nature of the two-phase material in which rubber particles are dispersed in a matrix of polypropylene (PP). Dynamic mechanical analysis showed that the PP matrix contains a small amount of rubber. PP crystal lamellae in rubber particles in a well-annealed sample were observed by transmission electron microscopy, suggesting that PP had been occluded in the rubber phase. Such partial phase-mixing may be caused by homogenization under high shear during dynamic vulcanization. Wide angle X-ray diffraction (WAXD) studies showed that PP crystallites in TPE are smaller than those in neat PP. That is, the occluded rubber in the PP matrix may play the role of impurity to render the smaller crystallites. By WAXD analysis on crystal orientation and its relaxation in stretching and releasing processes, it was shown that the smaller crystallites suffer less plastic deformation and, rather, play the role of tie points to provide the elastic properties of the PP matrix itself. About 40 wt% of process oil was found to be loaded on TPE; however, the oil seems to play a minor role in providing the elastomeric character.