Dynamically vulcanized blends of polyoxymethylene (POM) and ethylene propylene diene terpolymer (EPDM) with and without compatibilizer were prepared by melt mixing in a twin screw extruder. Maleic anhydride (MAH) grafted EPDM (EPDM-g-MAH) has been used as a compatibilizer. Dicumyl peroxide was used for vulcanizing the elastomer phase in the blends. Mechanical, dynamical mechanical, thermal, and morphological properties of the blend systems have been investigated as a function of blend composition and compatibilizer content. The impact strength of both dynamically vulcanized blends and compatibilized/dynamically vulcanized blends increases with increase in elastomer content with decrease in tensile strength. Dynamic mechanical analysis shows decrease in tan delta values as the elastomer and compatibilizer content increased. Thermograms obtained from differential scanning calorimetric studies reveal that compatibilized blends have lower T-m values compared to dynamically vulcanized blends, which confirms strong interaction between the plastic and elastomer phase. Scanning electron microscopic observations on impact fractured surface indicate reduction in particle size of elastomer phase and its high level of dispersion in the POM matrix. In the case of compatibilized blends high degree of interaction between the component polymers has been observed.