AbstractAlthough the utilization of recycled polymers is essential to sustain the environment, conventional recycled polymers face limitations in application due to the degradation of their properties caused by impurities. To solve the problem the performance deterioration of these recycled polymers, this study aimed to enhance their compatibility by chemically adding polypropylene‐graft‐maleic anhydride (PP‐g‐MAH) and physically manipulate a screw profile by using an extrusion simulation program. As a result of applying the optimized extrusion process set by the simulation program, significant improvements in the compatibility and dispersion of fillers within the polymer were observed through scanning electron microscopy image analysis. In addition, through detailed analysis of rheological data, the positive impact of adding compatibilizer and changing screw profile on rheological properties was demonstrated. As the compatibility of recycled polymer blends improved, tensile strength increased by approximately two‐fold and thermal conductivity was significantly improved, which were decisive factors in dramatically enhancing the performance of recycled polymers. These improved polymer properties provide an opportunity for recycled polymers to be applied more broadly and will expand the potential for new applications in various industrial fields.