New toughened poly (trimethylene terephthalate) (PTT) materials were obtained by reactive blending with poly (ethylene-butylacrylate-glycidyl methacrylate) (PTW). Morphology observation showed the well-dispersed domains of PTW in PTT matrix. The notched impact strength of the blends with 30wt% PTW is obviously higher than that of pure PTT. PTT-g-PTW copolymer as compatibilizer was formed by the interfacial reaction between the end epoxy group of PTW and the carboxylic or hydroxyl groups at the chain ends of PTT in the blends. Large number of stretched polymeric fibrils are uniformly distributed on the Izod impact fractured surface, which leads to an improvement in fracture toughness due to the consumption of fracture energy.