Nano-scale poly(butylene terephthalate) (PBT) fibers were prepared from PBT/cellulose acetate butyrate (CAB) immiscible polymer blends due to in situ microfibrillar formation during a melt extruding process. The morphological development of the dispersed phase was studied with samples collected at different zones in a twin screw extruder. It was found that the holistic developmental trends of PBT dispersed phase were nearly the same. Fibers began to form even under the shear flow of the twin-screw extruder. The morphology developmental mechanism of the dispersed phase involved the formation of sheets, holes and network structures, then the size reduction and formation of nanofibers. The effect of viscosity ratio, blend ratio, and shear rate on the morphology evolution was also studied by analyzing the shape and size distribution of the samples. The diameter distribution of the nanofibers could be affected by viscosity ratio, blend ratio, and shear rate. POLYM. ENG. SCI., 51:835-842, 2011. (C) 2011 Society of Plastics Engineers