The morphological development and crystallization behavior of a poly(ethylene terephthalate)/poly(hydroxyl ether of bisphenol A) (phenoxy) blend were studied with time-resolved light scattering, optical microscopy, differential scanning calorimetry, and small-angle X-ray scattering (SAXS). During annealing at 280 degrees C, liquid-liquid phase separation via spinodal decomposition proceeded in the melt-extruded specimen. After the formation of a domain structure, the blend slowly underwent phase homogenization by the interchange reactions between the two polymers. Specimens annealed for various times (t(s)) at 280 degrees C were subjected to a temperature drop and the effects of liquid-phase changes on crystallization were then investigated. The shifts in the position of the cold-crystallization peaks indicated that the crystallization rate is associated with the composition change of the separated phases as well as the change of the sequence distribution in polymer chains during annealing. The morphological parameters at the lamellar level were determined by a correlation function analysis on the SAXS data. The crystal thickness (l(c)) increased with t(s), whereas the amorphous layer thickness (l(a)) showed little dependence on t(s). Observation of a constant la value revealed that a large number of noncrystallizable species formed by the interchange reactions between the two polymers were excluded from the lamellar stacks and resided in the interfibrillar regions, interspherulitic regions, or both. (C) 2007 Wiley Periodicals, Inc.