Competition between phase separation and transesterification in immiscible polymer blends of polycarbonate (PC) and a copolyester (PET) is studied as a function of time and temperature by differential scanning calorimetry (DSC) and small-angle neutron scattering (SANS). We found that (1) Global structure coarsens at T less-than-or-equal-to 200-degrees-C due to the dominance of phase separation over transesterification and melts at T greater-than-or-equal-to 220-degrees-C due to the dominance of transesterification at the domain interface. However, transesterification is slow but still significant even at T less-than-or-equal-to 200-degrees-C. (2) An intricate balance of transesterification and phase separation rates controls global and interfacial structures. (3) Interfacial structures become measurable under certain conditions, and the interfacial thickness between PC or PET and the copolymers generated by transesterification increases with time. (4) DSC results are consistent with results obtained by SANS, but the latter is more sensitive than the former and differentiates the structural change at different length scales caused by phase separation and transesterification.