The functionalization of EPR with glycidyl methacrylate (GMA) function by melt free radical grafting in a co-rotating twin-screw extruder is investigted. GMA is used as the monomer,styrene (St) is used as the comonomer in order to enhance the dispersion between EPR and GMA. The potential of using a GMA modified EPR (EPR-g-GMA) as the toughness precursor is examined as well. The presence of EPR-g-GMA reduced the particle size of the dispersed phase (PBT) along with improved cohesion between EPR and PBT phases. The results show that the grafting yield of EPR-g-GMA is up to 4.7 phr (grams per 100 grams of EPR) and the particle size of the dispersed phase attain-s to about 0.5μm, the Izod notch impact strength of PBT/EPR-g-GMA can reach to 51.6 KJ/m2 , which is 31 times of the pure PBT.