This article explores the effect of halloysite nanotubes (HNTs) and modified HNTs (M-HNTs) on the properties of immiscible blend system based on polar polyoxymethylene (POM) and nonpolar polypropylene (PP) polymers. HNTs have been modified by N-(β-aminoethyl)-γ-aminopropyltrimethoxysilane (APTMS). Modification is confirmed by Fourier transform infrared spectroscopy (FTIR), also FTIR confirms the interaction between polymer blend and HNTs/M-HNTs. Morphology of the nanocomposites are demonstrated by scanning electron microscope (SEM) and dispersion of HNTs/M-HNTs are observed by transmission electron microscope (TEM). In nanocomposites, average dispersed domain sizes reduce in the presence of HNTs/M-HNTs but significant reduction has been observed in the case of M-HNT-filled nanocomposites rather than unmodified HNT-filled nanocomposites. The M-HNT acts as a reinforcing agent as well as bridging tool in polar–nonpolar hybrid system. Modification of HNTs brings compatibility in between the blend partners and reveals improved dynamic mechanical, thermal, and tensile properties than that of the pure blend system. © 2013 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2014, 131, 39587.