Thermotropic liquid crystalline polymers, LCPs, are frequently blended with thermoplastics to achieve an in situ composite structure. Significant mechanical reinforcement is obtained for the matrix polymer in the direction of the LCP fibers, but the transversal properties are often inferior because of the incompatibility of the components. Blends of LCP with polypropylene, and with three related matrix polymers, and PP/LCP blends with added potential compatibilizers were prepared and studied for their mechanical properties and morphology. A notable improvement in impact strength was achieved when a small amount of ethylene-based terpolymer was added as compatibilizer. © 1993 John Wiley & Sons, Inc.