This paper reports a study of compatibilization and the mechanism of compatibilization of polypropylene (PP)/thermoplastic polyurethane (TPU) blends with maleated polypropylene (PP-MA) and its graft copolymer with polyethylene oxide (PEO), (PP-MA)-g-PEO. The results of scanning electron microscope (SEM) and dynamic mechanical analysis showed that (PP-MA)-g-PEO was a very good compatibilizer for PP/TPU blends, while PP-MA also produced some compatibilization. The cocrystallization between bulk PP and PP segments of the compatibilizers was evidenced by differential scanning calorimetry studies. The specific interaction between TPU and polar parts of the compatibilizers was studied with Fourier transform infrared spectroscopy.