Compatibility of A/B and functionalized A ternary polymer mixtures was studied by Monte Carlo simulation in a two-dimensional lattice. Polymer A was a nonreactive polymer, whereas polymer B was a reactive polymer and immiscible with polymer A. Functionalized polymer A could react with the end group of polymer B, leading to the formation of block copolymers. Simulation results showed the phase domain sizes dropped considerably with increasing functionalized polymer A content, indicating that the compatibility between polymer A and B could be markedly improved with the introduction of functionalized polymer A. Moreover, it was shown that the resulting block copolymers tended to distribute at the phase interface between polymer A and B, and the block copolymer conformation depended on the structures of polymer B and functionalized polymer A. In case 1, i.e., both polymer B and functionalized polymer A were with single end group, it could be found that the block A and block B of resulting A–B copolymer inserted into polymer A and polymer B phase domains, respectively. In case 2, i.e., functionalized polymer A was with single end group and polymer B was with double end groups, it was found that the resulting A–B–A triblock copolymer tended to connect two neighbor separated polymer A phase domains. However, in case 3, namely functionalized polymer A was with double end groups and polymer B was with single end group, it was found that the resulting B–A–B triblock copolymer was likely to form a folding conformation. These lead to the different compatibilizing effects for different polymer structures. Comparing with case 1 and case 2, functionalized polymer A with double end groups (case 3) had less effective to compatibilize the A/B polymer blends. For the purpose of comparison, same simulations were carried out in a three-dimensional lattice. The results showed the compatibility behavior of the mixtures was similar to those in the two-dimensional lattice with the addition of functionalized polymer A. However, the conformation of the resulting block copolymers was different from that in the two-dimensional lattice.