Ternary blends of polyphenylene sulfide (PPS) and liquid crystalline polymer (LCP) with either polyphosphazene, unmodified multiwall carbon nanotubes (MWCNTs) or SiC-coated MWCNTs, were prepared by melt blending. While polyphosphazene improved the compatibility between the PPS and LCP, unmodified MWCNTs promoted LCP domain deformation, from spherical to ellipsoidal. Long LCP fibers were formed in presence of SiC-coated MWCNTs due to the bridging effect of modified MWCNTs at the interface of PPS and LCP. This bridging effect was confirmed by field emission scanning electron microscopy (FESEM). The better dispersion of SiC-coated MWCNTs was confirmed by both FESEM and transmission electron microscopy analysis. The superior mechanical properties of SiC-coated MWCNTs added blend system can be attributed to the fibrillation of LCP and better dispersion of SiC-coated MWCNTs. Polyphosphazene containing blend system showed lowest thermal stability while blend with SiC-coated MWCNTs was found to be highest, among all the blend systems.