This paper reports on the microstructure, morphological evolution and the properties of oil resistant nitrile butadiene rubber (NBR)/polypropylene (PP) thermoplastic vulcanizates (TPVs) prepared by dynamical vulcanization (DV). The as prepared NBR/PP TPVs exhibited good mechanical properties, good elasticity, easy processability and good oil resistance. Interestingly, the dispersed NBR microparticles in the NBR/PP TPVs were actually the agglomerates of secondary NBR microparticles with a diameter of about 1.7 μm and the phase inversion of the NBR/PP TPVs during DV was dominated by the formation and agglomeration of these secondary NBR microparticles. More interestingly, many PP domains were embedded in the dispersed crosslinked NBR phase, attributed to the chemical reaction between the compatibilizers amine-terminated butadiene-acrylonitrile copolymer (ATBN) and maleic anhydride grafted polypropylene (MP) and the voids among the spherical secondary NBR microparticles. As the DV proceeded, the size of the dispersed NBR agglomerates and the thickness of the PP ligaments in the NBR/PP TPVs decreased, leading to the increase in the density of the NBR agglomerates and the strengthening in the rubber network of the NBR/PP TPVs. As a result, the mechanical properties, the elasticity and the oil resistance of the NBR/PP TPVs were obviously improved as the DV proceeded.