The phase behavior of mixtures of a hydrophobically modified polymer capable of forming associations and an unmodified polymer of the same chemical composition has been investigated. The associative thickener (AT) consists of poly(ethylene glycol) (PEG) end-capped at both ends with hydrophobic alkane groups. It is found that mixtures of the AT solution and the unmodified PEG phase separate into two distinct solutions, provided AT molar fractions are <0.65. This is despite the fact that the overall polymer concentration throughout both phases remains the same. However, the viscosities of the two phases were found to be very different. For example, for a 50:50 mixture at an overall concentration of 5 wt %, the viscosity of one phase was found to be 170 Pa s, consistent with the existence of an AT network, whereas the viscosity of the less viscous solution was measured to be 0.004 Pa s, indicating that nearly all the polymer in this phase is of the unmodified type. When the AT to total polymer ratio is >0.65 or when the overall polymer concentration is below 2%, no phase separation is observed. It is proposed that the phase separation behavior in this type of system is an entropically driven phenomenon. It is shown that by considering the entropy changes due to the association of the end groups, within a Flory-Huggins framework, all of the above features can be accounted for theoretically.