The objective of this study is to investigate the effect of reactive processing of commingled bottle waste polymer in an extruder. A variety of peroxides and monomers were tested to assess their influence on the final mechanical properties of the product. The reactive extruded polymer blends were prepared in two types of extruders: a co-rotating twin-screw extruder and a Buss co-Kneader single-screw extruder. Blends were analyzed for mechanical and thermal properties. The effectiveness of the different monomers and peroxides was evaluated in terms of improvement in impact properties. It has been found that the toughness of the polymer blend is improved by reactive processing. Depending on the amount and type of reactants, the impact strength can be improved by 220%, with a slight reduction in the modulus compared to an unmodified physical blend. The most suitable monomers were n-butylmethacrylate (BMA), t-butylamino ethylmethacrylate (TBAEMA) and a combination of styrene/maleic anhydride (ST/MAH). The peroxide should have a short half-lifetime compared to the average residence time in the extruder. The most effective monomers have a high initial reactivity and low rate of evaporation at the processing conditions used. Changes in processing conditions in the extruder influence the reaction conditions and therefore the final properties of the blend. Results were interpreted in terms of residence time, melting profile and peroxide concentration.