The phase separation and the coarsening process of polymer mixtures with a thermotropic liquid crystalline polymer (LCP) as one component are investigated. The LCP used is a main-chain type copolyester X-7G, comprised of p-hydroxybenzoic acid (60 mol %) and ethylene terephthalate (40 mol %) units. The isotropic, transparent, and homogeneous test specimens of the 50/50 mixtures of X-7G and poly(ethylene terephthalate) (PET) were prepared by a rapid solution-casting with an organic solvent. The specimens were heated rapidly to the test temperature (T jump), and an isothermal phase separation process was investigated at real time and in situ under a polarized light microscope. A rapid phase separation was observed, when the temperature was higher than the melting points of PET and X-7G, allowing us to study the late stage spinodal decomposition into anisotropic and isotropic liquid phases. The following sequences of the decomposition mechanisms were found as time elapses in this stage : (i) the self-similar growth of a percolating network of the anisotropic liquid phase rich in X-7G in the isotropic matrix phase rich in PET, (ii) disruption of the percolating network and shrinkage of the disrupted fragments into the anisotropic droplets, and (iii) diffusion and coalescence of the anisotropic droplets. The two important factors, transesterification and the liquid crystal effect which can affect the phase separation, are also discussed in the text.