Poly(2,6-dimethyl-1,4-phenylene ether) (PPE) is difficult to process without the use of solvents. PPE was dissolved in epoxy resin, and reaction-induced phase separation in the blend was studied using a time-resolved, small-angle Light-scattering camera equipped with a DSC stage. Laser light scattering measurements characterize the reaction-induced phase separation process. A four-stage model is discussed: (a) reaction prior to phase separation, (b) early stage of spinodal decomposition, (c) late stage of spinodal decomposition, and (d) refractive index changes and apparent phase dissolution. Cahn-Hilliard linear theory, yielding initial correlation lengths and effective interdiffusion coefficients, accounts for the early stage of phase separation by spinodal decomposition. Ln the late stage, the scattering peak position, q(m), starts to decrease with time according to a power law; however, the maximum in the scattered intensity, I-m, does not satisfy a power law due to the large change in the epoxy refractive index during cross-linking. The disperse-phase morphology and mechanical properties of the cured blend are investigated by SEM, TEM, and DMTA.