Thermoplastic elastomers from blends of natural rubber (NR) and polystyrene (PS) have been prepared by the solution-casting technique. The blend of NR and PS is an incompatible one and can be made compatible by the addition of NR-g-PS. The compatibilizing action of NR-g-PS in NR/PS blends has been studied with special reference to the effect of the nature of the casting solvents and compatibilizer loading. Chloroform and carbon tetrachloride were selected as the casting solvents. The nature of the casting solvent has a profound influence on the compatibilizing action of the graft copolymer. This has been explained based on the preferential interaction of the solvent with one of the components in the mixture. The domain size of the dispersed polystyrene phase was decreased by the addition of a few percent of the compatibilizer, followed by a leveling off at higher concentrations. The leveling off is an indication of interfacial saturation. The mechanical properties of the blends were improved by the addition of the compatibilizer.