In this article, the preparation of nanosized core-shell particles to induce ductility in polystyrene (PS) is described. FTIR spectroscopy, solid-state NMR spectroscopy, and DSC were used to examine the extent of miscibility of PS and poly(butylacrylate)-b-polyolefin diblock copolymers in a blend in which PS was chemically modified by copolymerization with 0.5-5 mol % of p-(hexafluoro-2-hydroxy isopropyl) styrene (HFS). Hydrogen bonding between the hydroxyl-groups and the carbonyl-groups of polybutylacrylate enhanced the miscibility and lead to randomly distributed polyolefin particles surrounded by a homogeneous PBA/PS matrix. Morphological parameters such as the size of the dispersed phase or extent of interpenetration between the components are controllable simply by changing the amount of interacting groups in the blend. The mechanical properties of the prepared blends were also studied. The intrinsic deformation behavior was investigated by compression tests, whereas the microscopic mode of deformation was studied by time-resolved small-angle X-ray scattering. It was shown that the macroscopic strain at break depends to a large extent on the diblock copolymer content and the degree of demixing between the rubber shell and PS matrix. Brittle behavior was observed for PS blends that contain more than 3 mol % HFS and show complete miscibility between the PS matrix and acrylate shell. For the blends showing partial miscibility, the compression tests demonstrated a pronounced decrease in strain softening with increasing diblock copolymer concentration. Furthermore, it was illustrated that dependent on the degree of demixing the microscopic deformation mode changes from crazing to cavitation induced shear yielding. (C) 2004 Wiley Periodicals, Inc.