Thermoplastic elastomers (TPEs) were prepared from ternary blends of ethylene propylene diene poly methylene rubber (EPDM), isotactic polypropylene (PP), and low loadings (5-10 phr) of different types of interfacial phase modifiers (like maleated EPDM, styrene-ethylene-co-butylene-styrene block copolymer, and maleated PP). These showed much improved physico-mechanical properties compared to the binary blend of EPDM-PP. The effects of non-polar paraffin oil and polar di-octyl phthalate liquid additives (5-20 phr) were investigated in these phase-modified ternary and binary EPDM-PP blends. Only 5 phr of liquid additives provided synergistic improvement in physical properties (maximum stress, modulus, and elongation at break) and generated improved finer morphology of the ternary blends as revealed from scanning electron and atomic force microscopy studies. Enhanced physical properties and dynamic mechanical properties of these blends were explained with the help of better phase morphology and enhanced crystallinity of the blends.