Binary nylon6/rubber blends with 50 or 60 weight percent of an EPDM rubber exhibit co-continuous morphologies and thereby relatively poor mechanical properties. This paper describes methods to develop nylon6/EPDM blends with a high amount of finely dispersed rubber particles embedded in a nylon matrix. Using a suitable compatibiliser and by slightly crosslinking the rubber phase during melt-mixing, it was possible to disperse up to 60 wt% rubber in the nylon matrix and to improve the mechanical properties markedly. These materials are called thermoplastic vulcanisates and exhibit good elastic properties with a thermoplastic processability. The influence of the compatibiliser, the crosslinking agent and the viscosity ratio rubber/thermoplastic on the blend phase morphology is investigated using transmission electron microscopy. It was found that the viscosity ratio rubber/nylon plays a crucial role in order to achieve a nylon6/rubber TPV with a fine rubber dispersion. The viscosity of the nylon phase should be low enough to shift the phase inversion towards higher rubber content. On the other hand, if the viscosity of the nylon is too low, a coarse blend morphology was achieved resulting in poor mechanical properties. 2002 Elsevier Science Ltd. All rights reserved.