This work investigates the effect of HNTs content on the mechanical, thermal and flammability properties of polypropylene grafted maleic anhydride (PP‐g‐MAH) compatibilized polyethylene terephthalate/polypropylene (PET/PP) blends. The synthesized composites were characterized after compounding using a twin‐screw extruder and injection‐molding machine. The tensile, flexural and impact strengths values peaked at 2 parts per hundred resin (phr). Thermogravimetric analysis showed a marked improvement in thermal stability of the fabricated composites. A gradual increase in T50 and Tmax with increasing HNTs content was observed. The limiting oxygen index revealed a linear relationship with HNTs content. Transmission electron microscopy images showed uniform dispersion of nanotubes at lower HNTs content and agglomerated structures were formed at higher HNTs content due to inter‐tubular interactions both in face‐to‐face or face‐to‐edge manner. The improvements in thermal stability and flammability are attributed to these interactions. Due to improved mechanical properties and flammability, the fabricated composites have potential applications in automotive industries.