A ternary blend of polysulfone (PSF), a thermotropic liquid crystalline polymer (TLCP), and a compatibilizer was investigated. The TLCP was composed of terephthalic acid (TPA), m-phthalic acid (MPA), p-acetoxybenzoic acid (Ac-HBA), and 4,4’-diacetoxy bisphenyl (Ac-BP). The compatibilizer was a block copolymer of low molecular weight polysulfone and a rigid-rod chain. Morphological investigations showed that the TLCP in the ternary system exhibited improved adhesion and dispersion in a much finer scale than in binary blends of PSF/TLCP prepared under the same processing conditions. Differential scanning calorimetry confirmed this result. Significant improvements were seen In the values of tensile modulus and strength.