Compatibilisation of immiscible poly(phenylene sulphide) (PPS)/wholly aromatic thermotropic liquid crystalline polymer (TLCP) blends is reported. In situ compatibilised PPS/TLCP blends were prepared in a twin-screw extruder by reactive blending of PPS and TLCP in presence of dicarboxyl-terminated poly(phenylene sulphide) (DCTPPS), The block copolymer formed during reactive blending, by transesterification reaction between carboxyl groups of DCTPPS and ester linkages of TLCP, is tested for its role as the compatibiliser by studying the morphology, mechanical and thermal properties of the compatibilised PPS/TLCP blends over a wide range of composition. The heat of melting (Delta H-m), crystallisation temperature (T-c) and heat of crystallisation (Delta H-c) of PPS phase are observed to decrease marginally as a result of improvement in the interfacial adhesion between the two phases on compatibilisation. The tensile properties and impact strength of PPS/TLCP blends are seen to improved on compatibilisation. This observation is further supported by morphological features of the blend.