Styrene-acrylonitrile-glycidyl methacrylate (SAG) copolymers with various contents of glycidyl methacrylate (GMA) were used to compatibilize the incompatible blends of styrene-acrylonitrile (SAN) and a liquid crystalline polymer (LCP). These SAG copolymers contain reactive glycidyl groups that are able to react with the carboxylic acid and/or hydroxyl end groups of the LCP to form the SAG-g-LCP copolymers during melt processing. The in situ-formed graft copolymers tend to reside along the interface to reduce the interfacial tension and to increase the interface adhesion. The morphologies of the SAN/LCP blends were examined by using scanning electron microscopy (SEM), where the compatibilized SAN/LCP blends were observed with greater numbers and finer fibrils than those of the corresponding uncompatibilized blends. The mechanical properties of the blends increased after compatibilization. The presence of a small amount (200 ppm) of ethyl triphenylphosphonium bromide (ETPB) catalyst further promotes the graft reaction and improves the compatibilization.