The effect of compatibilizing polycarbonate (PC) and LC5000, a thermotropic liquid crystalline polymer consisting of 80/20% of hydroxybenzoic acid and poly(terephthalate) with a laboratory synthesized compatibilizer was studied. The compatibilizer was synthesized by transesterification of PC and LC5000 with the aid of a catalyst. The effect of compatibilization was investigated by studying the mechanical and morphological properties of injection-molded plaques with different thicknesses. Substantial improvement was observed in the mechanical properties after compatibilization. Significant enhancement in the fibrillation was also observed in the samples after addition of compatibilizer. The surface finish of the compatibilized samples was smooth and homogenous as compared to the uncompatibilized samples. The skin-core phenomenon in the tensile fractured surfaces was less obvious in the former samples, indicating better adhesion and homogeneity. These morphological studies showed that the mechanical properties enhancement lay in improved fibrillation and interfacial adhesion between the dispersed and major phases.