The low-temperature notched Izod impact strength of poly(butylene terephthalate), PET, blends with acrylonitrile-butadiene-styrene terpolymers, ABS, can be improved by incorporating methyl methacrylate, glycidyl methacrylate. ethyl acrylate terpolymers, MGE, as a reactive compatibilizer. However, fracture properties depend on the order of mixing of the blend components. When all components of compatibilized blends are melt mixed together in a single-pass extrusion, the low-temperature toughness is improved; however, the room-temperature impact strength is reduced relative to uncompatibilized blends. Using a two-pass extrusion method where PET and MGE are melt mixed together in a first extrusion prior to incorporating ABS in a second extrusion, the room-temperature impact strength is superior to that of blends prepared by the single-pass method. When a two-pass method is used where ABS and MGE are combined prior to extrusion with PET, the impact properties at all temperatures are inferior to those of uncompatibilized blends. Evidence is presented which suggests that residual acids present in emulsion-made ABS material may cause a crosslinking reaction involving the epoxide functionality of MGE terpolymers resulting in a deleterious effect on the ABS mechanical properties and its blends with PET. By changing the order of mixing, the sequence of chemical reactions which occur can be controlled to optimize blend properties.