A comparison of glass transition temperatures measured by differential scanning calorimetry (DSC) and dynamic mechanical thermal analysis (DMTA) was made using microlayer composites with many alternating layers of two polymers. What appeared to be a third transition at a temperature intermediate between the glass transitions of the two components was observed in DMTA but not DSC. The mechanical origin of this intermediate damping peak in the layered composites was established. The viscoelastic properties of each polymer were modelled by a spring and dashpot in series, and the composite as a parallel arrangement of two Maxwell elements. It was shown that an anomalous damping peak can appear between the glass transition temperatures when the modulus of the composite can not drop below the modulus of the glassy layers, although the viscosity of the composite continues to be defined by the viscosity of the rubbery layers in this temperature range. The intermediate damping peak may be a general feature in the dynamic mechanical behavior of co-continuous multiphase systems including polymer blends and continuous fiber composites.