In general, particulate reinforcement is known to greatly enhance the polymer composite rigidity at the expense of its ductility. Therefore, careful addition of elastomers can restore the composites toughness without sacrificing their stiffness. Thus, this work investigates the effect of TPU elastomer (thermoplastic polyurethane) on the ductile character of fly ash‐reinforced polypropylene (PP) composites. First, fly ash powder with particle‐size less than 63 μm (FA) was analyzed in terms of its physico‐chemical properties. The as‐characterized FA fine powder was then incorporated into PP polymer matrix to produce 50/50 wt% PP/FA masterbatch using extrusion process. Thereafter, the as prepared masterbatch was used to elaborate three polymer composite series by modifying the amount of FA and TPU via injection molding process. Binary and ternary PP composites filled with 5, 10, 15, and 20 wt% of FA or 80%FA/20%TPU or 50%FA/50%TPU were successfully manufactured. The resulted composites series were characterized in terms of their structural, morphological, thermal, and mechanical properties. It was found that the addition of FA into PP composites improved the composites' rigidity but reduced their ductility, due to the high reinforcing ability of FA particles. However, the inclusion of TPU to the binary PP/FA system exhibited a beneficial effect for restoring the ductility without a dramatic loss in stiffness, due to the toughening effect of TPU elastomer and improved interfacial adhesion. Overall, the above results suggest that a balance between the ratios of rigid particles and elastomer in a polymer matrix produces a multiphase polymer system with optimal mechanical performance, which make them promising materials for engineering applications.