Production of stretchable and conductive polymer composites has attracted the attention of the scientific community due to their high potential for various applications including smart clothing, stretchable circuits, and strain gauges. However, the successful production of these materials through cost-effective techniques has remained a challenge due to several issues. This work presents, for the first time, a practical and ecofriendly approach towards the production of ground tire rubber (GTR)-based stretchable and conductive composites. GTR, with an average particle size of < 50 m, was compounded with maleated polyethylene (MAPE) matrix and carbon nanotubes (CNTs) via melt blending. The pre-vulcanized state of the GTR enabled us to produce thermoplastic vulcanizates (TPVs) with high concentrations, 60 wt.%, of the rubbery phase while still maintaining the MAPE’s continuous phase morphology. The GTR particles showed remarkable compatibility with the MAPE matrix. This behavior was shown to be a result of chemical bonding during the reactive extrusion of the MAPE and the GTR. The CNTs had an almost perfect level of dispersion within the MAPE matrix. This was ascribed to good MAPE/CNT compatibility caused by the interactions between the MAPE’s maleic anhydride moiety and the CNTs. This, combined with the fact that the CNTs were only present in the MAPE phase (segregated blend morphology) led to the composites’ very low electrical percolation thresholds. The composites showed excellent stretchabilities and elasticities due to the strong interfacial adhesion between the MAPE and the rubber particles. In addition, the composites showed excellent abilities to maintain their mechanical and electrical properties up to 1000 stretching cycles.