Poly(ethylene terephthalate) (PET) is a useful high-temperature plastic. Its shortcoming is that it has poor impact-strength properties. The impact strength of this polymer was dramatically improved by blending with a copolyester thermoplastic elastomer, or an acrylate core/shell elastomer. The addition of triphenyl phosphite (TPP) to the polyester elastomer/PET blends encouraged molecular weight buildup and resulted in improved impact strength and tensile properties. It was suspected that the phosphite interacts chemically with the components of the blend during processing and produces the improvements. Phosphorus-31 (P-31)-NMR techniques have provided a direct spectroscopic probe of the chemical nature of the phosphite additive after the processing steps. Solution and solid-state spectra have revealed the presence of products in which the polymer chains are grafted and crosslinked through the phosphorus additive. Up to a 60-fold increase in impact strength of PET was obtained by blending with elastomers in the presence of TPP. Amorphous PET is susceptible to environmental stress cracking by many solvents, whereas crystalline PET or PET elastomer blends exhibit high resistance to solvent cracking. Similar improvements in properties were also realized when PET obtained from recycled soft drink bottles was used.