Free radical melt grafting of glycidyl methacrylate (GMA) onto polypropylene (PP) was studied. The extent of GMA grafting and the molecular weight of the functionalized PP copolymers were controlled by carefully manipulating various reaction factors, such as monomer concentration, initiator concentration, reaction temperature, and molecular weight of the starting PP homopolymer. The use of a second monomer, styrene, in the grafting process helped to increase GMA grafting further and reduce chain scission, The GMA modified PP copolymer was found to be able to reactively compatibilize PP/acrylonitrile-co-butadiene-co-acrylic acid rubber (NBR) blends. Up to an eight-fold increase in the impact energy of the PP/NBR blend was obtained. The compatibilizing capacities of the reactive copolymers, in terms of impact energy improvement of the PP/NBR blend, were found not to be exclusively dependent on the total concentration of reactive functionalities in the matrix of the blend. The characteristics of the reactive copolymers, i.e., the extent of functionalization and the molecular weight, were found to have significant influences on the compatibilizing capacity. A large amount of moderately functionalized copolymer offers better compatibilization performance than a small amount of highly functionalized copolymer. A significant drop in impact energy was observed with declining molecular weight of the copolymer.