The role of organically modified layered silicate as a compatibilizer for immiscible polystyrene (PS) with polypropylene (PP) or polypropylene grafted with maleic anhydride (PP-g-MA) blends was investigated. Scanning electron micrographs (SEM) revealed efficient mixing of the polymers in the presence of organically modified layered silicate. X-ray diffraction (XRD) patterns and transmission electron microscopic (TEM) observations showed that silicate layers were either intercalated or exfoliated, depending on their interactions with the polymer pair, and were located at the interface between the two polymers. The compatibilizing action of the organically modified layered silicate resulted in a decrease in interfacial tension and particle size and in a remarkable increase in mechanical properties of the modified immiscible blends. (C) 2004 Elsevier Ltd. All rights reserved.