Properties of recycled Poly(ethylene terephthalate) were greatly improved. Recycled PET was blended with LLDPE-g-MA by low-temperature solid-state extrusion. Mechanical properties of the blends were affected obviously by the added LLDPE-g-MA. Elongation at break reaches 352.8% when the blend contains 10 wt % LLDPE-g-MA. Crystallization behavior of PET phase was affected by LLDPE-g-MA content. Crystallinity of PET decreased with the increase of LLDPE-g-MA content. FTIR testified that maleic anhydride group in LLDPE-g-MA reacted with the end hydroxyl groups of PET and PET-co-LLDPE-g-MA copolymers were in situ synthesized. SEM micrographs display that LLDPE-g-MA phase and PET phase are incompatible and the compatibility of the blends can be improved by the forming of PET-co-LLDPE-g-MA copolymer. LLDPE-g-MA content was less, the LLDPE-g-MA phase dispersed in PET matrix fine. With the increase of LLDPE-g-MA content, the morphology of dispersed LLDPE-g-MA phase changed from spherule to cigar bar, then to irregular spherule. (c) 2008 Wiley Periodicals, Inc.