The morphology of blends of poly(acrylonitrile-co-butadiene-co-styrene) (ABS) and poly(ethylene terephthalate glycol) (PET-G) has been investigated with special reference to the effect of blend ratio and compatibilization. Scanning electron microscopy (SEM) examination revealed different morphologies such as dispersed, cocontinuous and phase inverted depending on the composition, which indicates that the binary blends are immiscible and form a two-phase structure. Tensile properties decreased with increase in the ABS content while the impact strength reached an optimum at ca. 70% ABS. Influence of a triblock co-polymer based on styrene and butadiene (SBS) on morphology, mechanical measurements and failure topography was used as criterion of the compatibilization effect. The compatiblizing action of SBS was evidenced by the sharp decrease in domain size of the dispersed phase followed by an increase at higher concentrations. The conformation of the compatibilizer at the interface was further analyzed based on the area occupied by the compatibilizer at the blend interface. The results were in agreement with the theoretical predictions of Noolandi and Hong. The extent of interface adhesion in these blends was analyzed by examination of the fracture-surface morphology. Addition of SBS also improved notched impact, elongation-at-break, tensile strength and modulus of elasticity. These results confirm that SBS is an effective compatibilizer for ABS/PET-G blends.