The effects of a multi-layered rubber-acrylic impact modifier on the morphology and rheology of poly(methyl methacrylate) (PMMA)/impact modifier (IM) blends are investigated. Morphologies of the blends obtained by TEM show that the size of the impact modifier domains is uniform and unchanged, and the shape remains spherical, although the IM concentration is increased. It is also shown that the fracture surfaces of the blends directly examined by SEM have indication of strong adhesion between the IM particles and the PMMA matrix. Our results of the rheological study reveal that the complex viscosity of the blends is strongly influenced by the content of the modifier, while the addition of the impact modifier hardly changes the apparent viscosity measured in the capillary experiments. We note that when high frequency is applied in the oscillatory shearing experiments, the complex viscosity of the blend abruptly increases and approaches that of impact modifier, as the IM concentration reaches a certain critical value. The experimentally observed effects of impact modifier on the rheology of the PMMA/IM blends are interpreted considering possible physical interactions via entanglements of the acrylic shell molecules with the PMMA matrix molecules or other shell molecules. In addition, the dynamic shear measurements are compared with an emulsion model for immiscible blends by Palierne [12]. Significant deviations between the results from the dynamic shear experiments and the emulsion model applied are observed, and this may be due to the strong entanglements of the acrylic shell of the impact modifier particles with the PMMA matrix molecules or other shell molecules.