Polypropylene (PP)/polybutene-1 (PB) alloys within reactor were prepared by MgCl2-supported Ziegler-Natta catalyst with sequential two-stage polymerization technology. First, propylene homo-polymerizations were carried out to form isotactic polypropylene (iPP) particles containing active catalyst. Then, butene-1 was subsequently polymerized to form polybutene-1 phase inside the iPP particles. Finally, iPP/PB alloys with spherical shape and adjustable PB content were synthesized. The catalytic activity and catalytic stereospecificity of the Z-N catalyst in the two-stage polymerization process are discussed. The composition and physical properties of the PP alloys were characterized by FT-IR, 13C-NMR, SEM, DSC and XRD. It was found that the in-reactor PP alloys are mainly composed of PP and PB with a little amount of poly(butene- co-propylene) random copolymers and poly(butene-block-propylene) block copolymers. SEM measurements verified that the PB phases with size in the range of 300-400 nm dispersed in the PP matrix uniformly. The incorporation of PB upon the PP matrix affects the properties of final products greatly.