The development of morphology from pellet-sized particles to submicrometre droplets during the polymer-blending process is investigated for two pairs of polymer blends. The systems are blends of a rubbery phase in a glassy matrix, namely amorphous nylon/ethylene-propylene rubber and polystyrene/ethylene-propylene rubber blends. In each case the investigation is pursued for a non-reactive blend and a similar reactive blend where the phases may chemically react at the interface during the blending process. The dispersed phase particle size distribution is determined as a function of mixing time for these systems. The behaviour of the blends with matrices of nylon and polystyrene is qualitatively similar. The major reduction in the dispersed phase sine is found to occur at short mixing times, in conjunction with the softening process. For example, in the case of a reactive nylon/ethylene-propylene rubber blend, the volume average particle diameter of the dispersed phase is reduced from similar to 4 mm (pellet size) to similar to 1 mu m within the first 90 s of mixing. At intermediate mixing times, the morphology consists of a large number of small dispersed phase particles (which are about the same size as the particles observed in the final blend) along with a small number of very large particles which constitute most of the volume occupied by the rubber phase. The effect of subsequent mixing is primarily to reduce the size of the largest particles in the size distribution. The interfacial chemical reaction between the phases reduces the dispersed phase size and narrows the size distribution.