The emulsion terpolymerization of methyl methacrylate (MMA), ethyl acrylate (EA), and acrylic acid (AA) was carried out under a nitrogen atmosphere at 70 degrees C. The final terpolymer conversion was determined gravimetrically. The synthesized MMA-EA-AA terpolymer was characterized with H-1-NMR spectroscopy, thermal analysis, and gel permeation chromatography. Glass-transition temperatures of the MMA-EA-AA terpolymer were determined with a differential scanning calorimeter. Ethylene-propylene-diene monomer rubber (EPDM)/poly(vinyl chloride) (PVC) blends were prepared with different blend ratios (10/90, 20/80, 30/70, 40/60, and 50/50) in the presence and absence of MMA-EA-AA as a compatibilizer. The morphology of those blends was examined with the aid of a scanning electron microscope. The scanning electron micrographs in the presence of the MMA-EA-AA terpolymer illustrated the disappearance of the macroscale phase separation of EPDM/PVC blends as a result of the incorporation of MMA-EA-AA into that blend, indicating an improvement of the homogeneity. The mechanical properties of the EPDM/PVC blend films and the dielectric properties of the melt blends were investigated. The swelling behavior of the cured blends in the brake fluid was also discussed. The results illustrated that the mechanical properties, the weight swelling values, and the dielectric constant values showed linear behavior versus the blend ratios after the incorporation of the terpolymer. However, those values showed deviations from linearity in the absence of the terpolymer. That, in turn, ensured the results obtained with the scanning electron microscope. The results reveal that the MMA-EA-AA terpolymer prepared can be used successfully to improve the homogeneity of EPDM/PVC blends used in hose and oil seal applications. (C) 2008 Wiley Periodicals, Inc.