The structure and mechanical properties of acrylate styrene acrylonitriie (ASA) and ASA/polybutylene terephthalate (PET) blends have been studied. The morphology of ASA is found to conform to a previous model. 40/60 and 60/40 blends of ASA/PBT have a two-phase, dispersed morphology while the 50/50 blend is shown to have a co-continuous structure. As processing temperature is increased, the mechanical properties decrease, due to PET degradation. The 60/40 ASA/PBT blend has very poor impact resistance because of the continuous, degraded PET matrix. Better mechanical properties a re observed for blends with a continuous ASA matrix, particularly in the 50/50 blend. Fracture surface analysis reveals a unique morphology of mushroom-like PET fibrils for the low processing temperature samples near the crack tip. This is thought to occur due to the competition of cohesion and adhesion of the PET with the ASA matrix.