A series of new Polypropylene (PP)-clay blends, containing 5 wt % clay, were prepared by melt compounding with maleic anhydride grafted poly(ethylene-co-octene) (MAH-g-POE) as the compatibilizer by varying its content from 0 to 20 wt %. The effect of MAH-g-POE on the PP-clay miscibility was examined by X-ray diffraction (XRD), scanning electronic microscope (SEM) observation, differential scanning calorimeter (DSC) analysis, dynamic mechanical thermal analysis (DMTA), and rheological testing in sequence. The results showed that the addition of MAH-g-POE could improve the dispersion of clay layers in PP matrix and promoted the interaction between PP molecules and clay layers. At 10 wt % NIAH-g-POE, the PP-clay blend exhibited a highest value of Tc,onset and Tg as well as a biggest melt storage modulus (G'), indicating the greatest PP-clay interaction. On the other hand, improved toughness and stiffness coexisted in blends with 5-10 wt % loading of MAH-g-POE. In view of SEM and DMTA observations, MAH-g-POE was well miscible with the PP matrix, even with the concentration up to 20 wt %. (c) 2005 Wiley Periodicals, Inc.