In order to obtain higher thermoelectric and mechanical properties in non-polar thermoplastic vulcanizates (TPVs), the Butyl rubber/Polypropylene (TPVs)/hydroxylated graphene (HGE) composites with nanosheet network were prepared through masterbatch technique and based on thermodynamic calculations, using polypropylene-graft-maleic anhydride (PP-MA) as a compatibilizer. The FTIR and Raman spectra revealed the introduced maleic anhydride group on PP-MA can form strong interfacial interaction with hydroxyl-containing functional groups on HGE. Morphology study indicated the rubber particles in the composites occupied the most volume of the PP phase, as expected to hinder the aggregation of HGE and form the effective nanosheet network. The nanosheet network can be combined with the IIR cross-linked particles during the dynamic vulcanization process to improve the interface bonding between PP and IIR, thus increasing the tensile strength of TPVs. When the content of HGE reached the percolation threshold (2 wt.%), the nanosheet network of HGE was formed, and the AC conductivity, dielectric permittivity and thermal conductivity increased sharply. The prepared TPVs/HGE nanocomposites have significantly improved in mechanical properties, thermal properties and dielectric properties, which provides a guarantee for their potential application as multifunctional TPVs polymers.