Reactive extrusions were performed with blends of nylon 6 and a liquid crystalline copolyesteramide (LCP) including a functionalized elastomer (maleic anhydride grafted ethylene-propylene-diene terpolymer), The functionalized elastomer acts as a compatibilizer at the interface. The thermal behavior of the blends suggests partial compatibility of the components endowed by the produced graft-copolymer. A finer dispersion was observed for the compatibilized blends. Fine fibrils were also observed even when no extensional force was applied, indicating the importance of interfacial adhesion for the dispersed phase deformation. The shear viscosity of the ternary blend was lower than those of the neat polymers. The mechanical properties of the compatibilized blends, however, were not significantly improved except when an optimum amount of compatibilizer was added. Explanations for the compatibilizing action of the elastomer and mechanical performance of the ternary blends are presented.