Thermoplastic elastomer styrene-ethylene-butylene-styrene block copolymer (SEBS) has excellent mechanical properties and aging resistance, so it has good application prospects in thermoplastic solid propellants. The selection of plasticizer is one of the keys to the formulation design of thermoplastic solid propellant. The compatibility of the plasticizer with the polymer determines the plasticizer's ability to plasticize the polymer's molecular chain segments. Herein, the compatibility of four plasticizers with SEBS was investigated, and the results declared that the order of compatibility between SEBS and the four plasticizers is SEBS/WO > SEBS/DOS > SEBS/DEP > SEBS/TA. Physical compatibility of SEBS binder with plasticizer triacetin (TA), diethyl phthalate (DEP), dioctyl sebacate (DOS), and 26# industrial white oil (WO) was simulated using molecular dynamics (MD) method via Materials Studio 8.0, and the simulation results were verified experimentally. The results showed that the compatibility of SEBS with these plasticizers can be comprehensively evaluated by analyzing solubility parameters, radial distribution functions, and blend miscibility simulations.