A method of creating a modified heterophasic polyolefin composition is provided, whereby a polyolefin composition having at least two phases is melt mixed with a free radical generator, such as a peroxide, and a compatibilizing agent characterized by at least one nitroxide radical and at least one unsaturated bond capable of undergoing a radical addition reaction. Modified heterophasic polyolefin compositions with increased melt flow rates, impact strength, and clarity, which incorporate the compatibilizing agent, are also included within the scope of the invention.