The subject invention relates to a process for preparing a compatibilized blend of a first polymer which is a rubber containing free nitrile groups, hydroxyl groups, carboxyl groups, amide groups, amine groups or mercapto groups and a second dissimilar polymer which is a thermoplastic polymer containing nitrile groups, hydroxyl groups, carboxyl groups, amide groups, amine groups or mercapto groups, which comprises reacting a rubber having pendant blocked isocyanate groups bound thereto with the first polymer and the second dissimilar polymer, wherein the compatibilized blend contains from about 55 weight percent to about 75 weight percent of the rubber containing nitrile groups, hydroxyl groups, amide groups, amine groups or mercapto groups.