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Abstract Creating a sustainable economy for plastics demands the exploration of new strategies for efficient management of mixed plastic waste. The inherent incompatibility of different plastics poses a major challenge in plastic mechanical recycling, resulting in phase‐separated materials with inferior mechanical properties. Here, this study presents a robust and efficient dynamic crosslinking chemistry that effectively compatibilizes mixed plastics. Composed of aromatic sulfonyl azides, the dynamic crosslinker shows high thermal stability and generates singlet nitrene species in situ during solvent‐free melt‐extrusion, effectively promoting C─H insertion across diverse plastics. This new method demonstrates successful compatibilization of binary polymer blends and model mixed plastics, enhancing mechanical performance and improving phase morphology. It holds promise for managing mixed plastic waste, supporting a more sustainable lifecycle for plastics.