Graft copolymer of styrene and methyl methacrylate onto natural rubber was synthesized by emulsion polymerization using cumene hydroperoxide and tetraethylene pentamine as a redox initiator. Statistical analysis, two-level factorial design, was used to study the influence of four process variables and the interaction of these process variables. The process variables were initiator concentration, reaction temperature, ratio of styrene to methyl methacrylate, and ratio of monomer to natural rubber. The two-level factorial experimental design showed that initiator concentration, reaction temperature, and ratio of monomer to natural rubber had a significant effect on grafting efficiency. Reaction temperature and ratio of monomer to natural rubber had a significant effect on percentage graft copolymer. The grafted natural rubber was characterized by FT-IR spectroscopy and the particle morphology was determined by transmission electron microscopy. The grafted natural rubber product could be used as an impact modifier for PVC, thus, blends of the grafted natural rubber products and PVC were prepared. The mechanical properties, thermal properties, and morphology of the grafted natural rubber modified PVC were investigated as a function of grafted natural rubber content.