Abstract: Toughening effect on poly(butylenes Terephthalate) with a novel impact modifier(modified maleic anhydride grafted polyethylene-octene elastomer) (M-POE-g-MAH) was studied. Comparing to pure POE-g-MAH, Influence of impact modifier,s component and content on mechanical properties of blends was investigated. Using scanning electronic microscopy (SEM) photographs of impact fracture surface, morphologies responsible for brittle-tough transition were also analyzed. The results indicate that a brittle-tough transition occurred when POE-g-MAH content was up to 10% in M-POE-g-MAH/PBT blends, whereas brittle-tough transition occurred when POE-g-MAH content was up to 15% in POE-g-MAH/PBT blends. PBT toughened by M-POE-g-MAH impact modifier has more advantages in properties and cost, and its blend has a higher ratio of property to cost in contrast with pure POE-g-MAH impact modifier.