This paper reports on a new route to prepare functional polymer blends for fuel cell's proton exchange membrane applications. Polyvinylidene fluoride (PVDF) and styrene-ethylene/butylene-styrene (SEBS) thermoplastic elastomer were melt blended and extruded into films. Interface modification using poly(methylmethacrylate-butylacrylate-methylmethacrylate) block copolymer (MAM), and two grades of poly (styrene-butadiene-methylmethacrylate) block copolymer was used to optimize the blends performance. The films made out of these blends were grafted with sulfonic acid moieties to obtain ionic conductivity leading to semi-fluorinated proton exchange membranes. The effect of varying the nature and concentration of the compatibilizer on the morphology and properties of a 50/50 wt.% PVDF/SEBS blends was investigated. SEM analysis showed that the addition of the block copolymers to the blends affected the morphology significantly and in the best case, that as low as I wt.% block copolymer was sufficient to dramatically reduces the segregation scale and improves mechanical properties. The samples were characterized in terms of morphology, microstructure and thermo-mechanical properties and in terms of conductivity, ion exchange capacity (IEC) and water uptake to establish the blends morphology-property relationships. Compatibilized blend membranes showed conductivities up to 3 x 10(-2) S cm(-1) at 100% relative humidity, and an IEC = 1.69 meq g(-1). Water swelling decreased for compatibilized blend membranes. Crown Copyright (c) 2006 Published by Elsevier B.V. All rights reserved.