Phase separation during the formation of poly(N-isopropylacrylamide) (PNIPA) hydrogels was investigated using real-time photon transmission and temperature measurements. The hydrogels were prepared by free-radical crosslinking polymerization of N-isopropylacrylamide (NIPA) in the presence of N,N'-methylenebisacrylamide (BAAm) as a crosslinker in an aqueous solution. The onset reaction temperature T-o was varied between 20 and 28degreesC. Following an induction period, all the gelation experiments resulted in exothermic reaction profiles. A temperature increase of 6.5 +/- 0.6degreesC was observed in the experiments. It was shown that the temperature increase during the formation and growth process of PNIPA gels is accompanied by a simultaneous decrease in the transmitted light intensities I-tr. The decrease in I-tr at temperatures below the lower critical solution temperature of PNIPA was explained by the concentration fluctuations due to the inhomogeneity in the gel network. At higher temperatures, it was shown that the gel system undergoes a phase transition via a spinodal decomposition process.