Glycidyl methacrylate (GMA) grafted acrylonitrile-butadiene-styrene (ABS) in the presence of styrene (St) monomer (AGS) was used as a compatibilizer in the immiscible poly(butylene terephthalate)/poly(acrylonitrile-styrene-acrylate) (PBT/ASA) blends. SEM analyses display a better dispersion of ASA particles in the PBT matrix with the content of AGS less than 4.0 wt% compared with the PBT/ASA blends. Rheological measurements show that the melt elasticity and melt strength of blends increase with increasing ABS-g-(GMA-co-St) content. The behavior of blends shifts from “liquid-like” to “solid-like” and the relaxation time moves to higher values by introducing AGS. 3.0 wt% AGS is the optimum concentration for PBT/ASA system.