Liquid crystalline copolyester-polyamide 66 (LCPES/PA66) composites compatibilized by liquid crystalline copolyesteramide (LCPEA) were prepared by injection molding. The LCPES employed was a commercial copolyester, Vectra A950, and the LCPES was a semiflexible thermotropic copolyesteramides based on 30 mol% of p-amino benzoic acid (ABA) and 70 mol% of poly(ethylene terephthalate) (PET). Thermal analysis, mechanical characterization, and morphological investigations were conducted on the blends. The dynamic mechanical analysis (DMA) and differential scanning calorimetry (DSC) tests showed that LCPEA is an effective compatibilizer for the LCPES/PA66 composites. The mechanical measurements showed that the stiffness, tensile strength and izod impact strength of the in-situ composites are improved by adding LCPEA because of the compatibilization and reinforcement to LCPES/PA66 composites. However, the properties improvement vanished when LCP content reached 10 wt%. The drop weight dart impact test was also applied to analyze the impact fracture characteristics of these composites. The results showed that the maximum impact force (F-max), crack initiation and propagation energy all improved with the addition of a small percent of LCPEA. From these results, it appeared that LCPEA prolongs the time for crack initiation and propagation. It also increases the energies for crack initiation and propagation, thereby leading to toughening of the LCPES/PA66 in-situ composites. Finally, the correlation between the mechanical properties and morphology of the composites is discussed.