This study is directed towards the development of modifiers for and the understanding of their role in improving the impact properties of an engineering polymer, polyacetal (POM). It is demonstrated that modifiers that induce ion-dipole interactions can lead to substantial enhancements in the room temperature impact performance of POM without sacrificing its unique balance of mechanical, thermal, and chemical resistance properties. The mechanical and physical properties of blends of a commercial copolymer type polyacetal (POM] with terpolymers of ethylene, methylacrylate and acrylic acid (EAAT) and its zinc ionomer form (EAAT-Zn), are reported. Substantial differences both in the mechanical and impact performance were found in these two modified POM systems. DSC and optical microscopy studies of such blends demonstrates only minor differences in the microcrystalline structure of the two blend systems. A nearly three fold reduction in the spherulite size of POM was found from addition of as little 5% of either modifier, thus ruling out this mechanism for the observed increased toughness of the blends. Dynamic mechanical measurements and cryofractured surface microscopy observations indicate that enhancements in the physical properties of POM modified with zinc ionomers of EAAT are due to enhanced interfacial adhesion and to the (inherent] mechanical rigidity (due to ionic interactions), of the modifier. In these blends the tensile and impact strength are found to be a function of the degree of neutralization of the terpolymer acid content. In particular, an optimum balance of impact and tensile properties is obtained with partial neutralization (in the range of 25 to 50% of the terpolymer acid content) and at modifier addition levels in POM, in the range of 5 to 10%. The EAAT modifier for POM was found to be ineffective even up to 20% addition as compared to EAAT-Zn modifier. Ion-dipole interactions are thus shown to be more influential than the hydrogen bonding that occurs in EAAT-POM blends. The study suggests a new approach to modify polar engineering polymers via such interactions.