Novel blends of polyurethane and acrylonitrile butadiene styrene, in both forms, compatibilized and uncompatibilized, were developed by melt reactive extrusion technique in a twin-screw extruder. This technique involved acrylonitrile butadiene styrene grafted maleic anhydride (ABS-g-MAH) as the compatibilizer. The objective of this study was to enhance the rigidity characteristics of polyurethane by melt blending acrylonitrile butadiene styrene into polyurethane using a compatibilizer. The blends were analyzed using different techniques to confirm the occurrence of compatibilization reaction between the parent polymers and the compatibilizer. It is observed that addition of the compatibilizer has improved the mechanical properties of the resultant blends.