The morphology development of polypropylene (PP)/polyethylene terephthalate (PET) /styrene-ethylene-butylene-styrene (SEBS) ternary blends and their fibers were studied by means of scanning electron microscopy (SEM) in conjunction with the melt linear viscoelastic measurements. The morphology of the blends was also predicted by using Harkin's spreading coefficient approach. The samples varying in composition with PP as the major phase and PET and SEBS as the minor phases were considered. Although SEM of the binary blends showed matrix-dispersed type morphology, the ternary blend samples exhibited a morphological feature in which the dispersed phase formed aggregates consisting of both PET and SEBS particles distributed in the PP matrix. The SEM of the blend samples containing 30 and 40 wt % of total dispersed phase showed an agglomerated structure formed between the aggregates. The SEM of the PP/PET binary fiber blends showed long well-oriented n-microfibrils of PET whereas in the ternary blends, the microfibrils were found to have lower aspect ratio with a fraction of the SEBS stuck on the microfibril fracture surfaces. These results were attributed to a core-shell type morphology in which the PET and SEBS formed the core-shells distributed in the matrix. The melt viscoelastic behavior of the ternary blends containing less than 30 wt %, of the total dispersed phase was found to be similar to the matrix and binary blend samples whereas the samples containing 30 and 40 wt % of dispersed phases exhibited a pronounced viscosity upturn and nonterminal storage modulus in low frequency range. These results were found to be in good agreement with the morphological results. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 114: 3737-3743, 2009