Ternary composites of Polypropylene (PP)/ethylene-octene copolymer (POE)/Barium Sulfate (BaSO4) (PP/POE/BaSO4) were prepared through a two-step process: BaSO4 master-batches were first prepared through blending of BaSO4 and POE, then blending with PP. Two families of phase structure were confirmed through SEM and DSC, depending on their interfacial interaction. Separation of POE and BaSO4 filler was found when untreated or titanate coupling agent treated BaSO4 filler were used. Encapsulation of BaSO4 particles by POE elastomer was achieved by using BaSO4 master-batch prepared through reactive blending of BaSO4 with POE in the presence of maleic anhydride (MAH) and dicumyl peroxide (DCP). The mechanical properties of the composites greatly rely on the morphology. The yield strength and the impact toughness of a composite with core-shell morphology are higher than those of composites with separated morphologies, but the former has lower flexural modulus and elongation at break than the latter. The interfacial interaction was evaluated by semi-empirical equations developed previously. The deformation and toughening mechanisms of the composites were also investigated. (C) 2003 Kluwer Academic Publishers.