The modification of the morphology of immiscible binary blends in a co-rotating twin-screw extruder equipped with capillary dies of various lengths has been studied. Blends of polycarbonate and polypropylene were investigated using scanning electron microscopy. The size and shape of the dispersed phase were found to be significantly affected by the viscosity ratio. The morphology of the blends containing 5% minor phase varied with radial and axial positions in the die. Capillary instabilities were observed at the entrance of the die. The generation and disintegration of these capillary instabilities were found to occur rapidly. Fibre formation was favoured for all blends containing higher concentrations of minor phase (20%). To investigate the influence of the interface on deformation of the minor phase, blends of polyethylene and polyamide were compatibilized with a polyethylene copolymer ionomer. The compatibilizer was found to be effective in considerably reducing the size of the minor phase. The final state of deformation of the dispersed phase was reduced significantly with addition of the ionomer.