Rubber toughening of thermoplastic polymers always decreases the tensile and flexural properties. In this article, an attempt is made to improve the tensile and flexural properties of a rubber-toughened polymer system viz., polypropylene (PP)/styrene-ethylene-butylene-styrene tri-block copolymer (SEBS) binary blend by blending a rigid polymer viz., polycarbonate (PC) with this binary system. The PP/SEBS blend with a blending ratio fixed at three levels, namely 95/5, 90/10, and 80/20, was melt mixed with 0-30 wt% PC to generate the various blend compositions studied. This choice of compositions enabled us to show how the mechanical properties varied as a function of (1) PP/SEBS ratio at a constant PC content and (2) PC content at a constant PP/SEBS ratio of the blend. Data on the corresponding binary blends, namely PP/SEBS and PP/PC, are also presented and discussed as reference systems. The data are discussed in detail for the effect of each component of the blend. As regards the morphology, some distinct changes were seen in the middle of composition ranges of the additives, i.e., around 10 to 20% PC level, and 95/5 and 90/10 PP/SEBS ratios. Variation of mechanical properties in the respective composition ranges are found consistent with the variations of blend morphology. Hence, a correlation of morphology and the properties is discussed. Furthermore, the results suggest stronger interfacial interaction between SEBS and PP than that between PC and PP. Scanning electron microscopic studies of appropriately etched impact fractured samples reveal the existence of composite droplets of SEBS and PC embedded in PP matrix, with SEBS forming the outer envelope around PC.