Modification of polypropylene (PP) by the addition of polyolefin elastomer (POE) and attapulgite (AT) has been investigated. The result have shown that the addition of POE and AT gave PP excellent mechanical properties of improved impact strength and comparable stiffness. The bonding between AT and the matrix was enhanced with the addition of dispersant EBS. AT was an effective nucleating agent for PP crystallization, and finer and more homogeneous spherulites of PP was obtained. In this study, the toughening mechanism of the composites was also discussed.