A dynamic vulcanization process conducted in a mixer capable of applying shear to polymer components at elevated temperature for producing a thermoplastic elastomer composition, said composition comprising dispersed particles of at least one first elastomer or rubber comprising halogenated isobutylene-containing elastomer and dispersed particles of at least one second elastomer or rubber, different from the first elastomer or rubber, having at least one functional group capable of reacting with and grafting to a polyamide, said particles of said at least one first and at least one second elastomers dispersed in a continuous thermoplastic polyamide matrix comprising at least one polyamide selected from the group consisting of nylon homopolymers, and nylon copolymers, said process comprising the steps of: dispersing, in said halogenated elastomer at least one curing agent or cure system suitable for crosslinking said halogenated elastomer to obtain a pre-compounded halogenated elastomer composition using shear conditions, mixing time and a temperature to uniformly disperse said curing agent or cure system but insufficient to substantially activate the curing agent or cure system; introducing said at least one polyamide and optionally at least one nylon thermal stabilizer or oxidative stabilizer or light stabilizer or combination of them, into said mixer and applying sufficient shear and heat to cause the nylon to melt and said optional stabilizer to be dispersed in said polyamide and form a polyamide mixture; introducing at least one nylon plasticizer into said mixer in an amount sufficient to cause the viscosity of said nylon mixture to substantially match the viscosity of said pre-compounded halogenated elastomer at the temperature and under the shear conditions present in said mixer; subsequently contacting said pre-compounded halogenated elastomer with said at least one polyamide and said at least one nylon plasticizer in said mixer and applying heat and shear to initiate dynamic vulcanization of said halogenated elastomer; and introducing said second elastomer into the mixer and continuing the heating and shearing to substantially disperse said second elastomer and substantially complete said dynamic vulcanization of said halogenated elastomer; and delivering said dynamically vulcanized thermoplastic elastomer composition from said mixer. dispersing, in said halogenated elastomer at least one curing agent or cure system suitable for crosslinking said halogenated elastomer to obtain a pre-compounded halogenated elastomer composition using shear conditions, mixing time and a temperature to uniformly disperse said curing agent or cure system but insufficient to substantially activate the curing agent or cure system; introducing said at least one polyamide and optionally at least one nylon thermal stabilizer or oxidative stabilizer or light stabilizer or combination of them, into said mixer and applying sufficient shear and heat to cause the nylon to melt and said optional stabilizer to be dispersed in said polyamide and form a polyamide mixture; introducing at least one nylon plasticizer into said mixer in an amount sufficient to cause the viscosity of said nylon mixture to substantially match the viscosity of said pre-compounded halogenated elastomer at the temperature and under the shear conditions present in said mixer; subsequently contacting said pre-compounded halogenated elastomer with said at least one polyamide and said at least one nylon plasticizer in said mixer and applying heat and shear to initiate dynamic vulcanization of said halogenated elastomer; and introducing said second elastomer into the mixer and continuing the heating and shearing to substantially disperse said second elastomer and substantially complete said dynamic vulcanization of said halogenated elastomer; and