Abstract: Oxazoline-functionalized ABS high rubber powder(oxa-ABSHR) was synthesized via reaction between ABS high rubber powder and aminethanol in o-dichlorobenzene solution. Various oxa-ABSHRs of different oxazoline conversion rates were produced, and they were applied in ABS/PET blends. Fourier Transform Infrared (FTIR) indicated that oxazoline groups had been introduced onto ABS high rubber powder successfully. The differential scanning calorimetry (DSC) and rheological tests demonstrated that PET was partially miscible with ABS because oxazoline groups have reacted with PET end groups. The scanning electrons microscopy (SEM) showed that PET particles dispersed in ABS matrix more regularly and the diameter was smaller. When adding 6wt% oxa-ABSHR whose oxazoline conversion rate was 50%, the izod impact strength of blends increased 102%. Key words: oxazoline-functionalized; toughen; blends