The modes of action of a diamine salt of fatty acid with a general structure of [RNHz+(CHz)JNH3+(R'COO-)z], referred to as a multifunctional additive (MFA) in carbon black and silica filled natural rubber (NR) compound have been studied. The mechanical properties have been enhanced by incorporating the MFA. Optimum mechanical properties for the natural rubber filled with carbon black compound are obtained at an MFA level which is estimated to give complete monolayer coverage of the carbon black surface. Studies on silica filled NR show a much higher optimum MFA level than for carbon black filled compounds, which is attributed to a different orientation of the MFA molecules at the silica-rubber interface. The MFA molecules may stand on the filler surface with their polar sites attached to its surface, giving rise to a much higher monolayer value. Filler dispersion, measured by computer-aided image analysis and scanning electron microscopy (SEM), showed that MFA gives improved dispersion at equivalent mixing time. The effect of the MFA on crosslink density of carbon black filled NR compounds was found to be small, in contrast to silica filled NR compounds, where the increase in crosslink density enhanced properties significantly. Techniques to examine the properties of compounds with and without MFA at equivalent levels of filler dispersion have been developed. Results show that, in addition to the improvement in filler dispersion, increased energy dissipation at the rubber-MFA-filler interfaces improves tear and tensile strength. A mechanism of adsorption to explain the mode of action of the MFA at the elastomer/filler interface has also been proposed.