A novel side-chain, liquid-crystalline ionomer (SLCI) with a poly(methyl hydrosiloxane) main chain and side chains containing sulfonic acid groups was used in blends of polyamide-1010 (PA1010) and polypropylene (PP) as a compatibilizer. The morphological structure, thermal behavior, and liquid-crystalline properties of the blends were investigated by Fourier transform infrared, differential scanning calorimetry, thermogravimetric analysis, and scanning electron microscopy. The morphological structure of the interface of the blends containing SLCI was improved with respect to the blend without SLCI. The compatibilization effect of greater than 8 wt % SLCI for the two phases, PA1010 and PP, was better than the effects of other SLCI contents in the blends. 2002 John Wiley Sons, Inc.