The compatibilizing effect of the triblock copolymer poly(styrene-b-ethylene-co-butylene-b-styrene) (SEBS) on the morphological and mechanical properties of virgin and recycled polypropylene (PP)/high-impact polystyrene (HIPS) blends was studied, with the properties optimized for rigid composite films. The components of the blend were obtained from municipal plastic waste, PP being acquired from mineral water bottles (PPb) and HIPS from disposable cups. These materials were preground, washed only with water, dried with hot air, and ground again (PPb) or agglutinated (HIPS). Blends with three different weight ratios of PP, and HIPS (6:1, 6:2, and 6:3) were prepared, and three different concentrations of SEBS (5, 6, and 7 wt %) were used for investigations of its compatibilizing effect. Scanning electron microscopy showed that SEBS reduced the diameter of dispersed HIPS particles in the globular and fibril shapes and improved the adhesion between the disperse phase and the matrix. However, SEBS interactions with PPb and HIPS influenced the mechanical properties of the compatibilized PPb/HIPS/SEBS blends. An adequate composition of PP/ HIPS, for both virgin and recycled blends, for applications in composite films with characteristics similar to those of synthetic paper was obtained with a minimal amount of SEBS and a maximal HIPS/PP ratio in the range of concentrations studied. (C) 2003 Wiley Periodicals, Inc.