This paper reports about the polymerization of epsilon-caprolactam monomer in the presence of low molecular weight hydroxyl or isocyanate end-capped ethylene-butylene elastomer (EB) elastomers as a new concept for the development of a submicron phase morphology in polyamide 6 (PA6)/EB blends. The phase morphology, viscoelastic behavior, and impact strength of the polymerization-designed blends are compared to those of similar blends prepared via melt-extrusion of PA6 homopolymer and EB elastomer. Polyamide 6 and EB elastomer were compatibilized using a premade triblock copolymer PA6-b-EB-b-PA6 or a pure EB-b-PA6 diblock reactively generated during melt-blending (extrusion-prepared blends) or built-up via anionic polymerization of epsilon-caprolactam on initiating -NCO groups attached to EB chain ends (polymerization-prepared blends). Two compatibilization approaches were considered for the polymerization-prepared blends: (i) the addition of a premade PA6-b-EB-b-PA6 triblock copolymer to the epsilon-caprolactam monomer containing nonreactive EB-OH elastomer and (ii) generation in situ of a PA6-b-EB diblock using EB-NCO precursor on which polyamide 6 blocks are built-up via anionic polymerization of e-caprolactam. The noncompatibilized blends exhibit a coarse phase morphology, either in the extruded or the polymerization prepared blends. Addition of premade triblock copolymer (PA6-b-EB-b-PA6) to a EB-OH/epsilon-caprolactam dispersion led to a fine EB phase (0.14 mum) in the PA6 matrix after epsilon-caprolactam polymerization. The average particle size of the in situ reactively compatibilized polymerization-prepared blend is about 1 mum. The notched Izod impact strength of the blend compatibilized with premade triblock copolymer was much higher than that of the neat PA6, the noncompatibilized, and the in situ reactively compatibilized polymerization blends. (C) 2004 Wiley Periodicals, Inc.