Abstract: Poly(butylene terephthalate)(PBT) showed low impact strength values. Whereas the addition of thermoplastic polyamide elastomers(TPAE) and compatibilizers alloys showed high impact strength values. Polarization optical microscope(POM) and scanning electron microscope(SEM) observations of the fracture surfaces and deformed regions beneath the fracture surfaces revealed that the fracture process of PBT was brittle which was originated from plastic constraint at the notch tip. The fracture of alloys was also caused by plastic constraint at the notch tip. However, the plastic deformation zone at the notch tip was composed of many voids and partially elongated fibrils, and this absorbed impact energy. The plastic deformation was enhanced by the transition of the stress state from plane strain to plane stress. The final fracture occurred from the notch tip connecting voids in the plastic deformation zone.