Polyactide (PLA) was blended with an ethylene/n-butyl acrylate/glycidyl methacrylate (EBA-GMA) terpolyrner and a zinc ionomer of ethylene/methacrylic acid (EMAA-Zn) copolymer. The phase morphology of the resulting ternary blends and its relationship With h.-tip-act behaviors were studied systematically. Dynamic vulcanization of EBA-GMA in the presence of EMAA-Zn was investigated by torque rheology, and its cross-link level was evaluated by dynamic mechanical analysis. Reactive compatibilization,between PLA and EBA. GMA was studied using Fourier transform infrared spectroscopy. The dispersed domains in the ternary blends displayed a "salami"-like phase structure, in which the EMAA-Zn phase. evolved.. from occluded subinclusions into continuous phase with decrease in the EBA-GMA/EMAA-Zn ratio. An optimus range of particle sizes of the dispersed domains for high impact toughness was identified. Also, the micromechanical deformation process Of these ternary blends was also investigated by,by Observation of the impact-fractured surfaces using the electron microscope. It was suggested that the low cavitation resistance of dispersed particles in conjunction with suitable interfacial adhesion was responsible for the Optimum impact toughness observed.