Shear-induced droplet breakup and coalescence were investigated by optical microscopy. Model polymer blends comprising 5% poly(propylene oxide) (PPO) dispersed in a poly(ethylene oxide) (PEO) matrix were studied in situ. Addition of 0.1% or 1.0% of PEO-b-PPO-B-PEO triblock copolymers facilitated breakup and inhibited coalescence. The steady-state,droplet size produced by breakup was reduced only slightly by addition of 0.1% copolymer and more substantially by addition of 1%. However, the kinetics of coalescence were suppressed effectively even when 0.1% of copolymer was added, and only marginal additional gains in suppressing coalescence were achieved by addition of more copolymer. Analysis of coalescence kinetics shows that in these systems the copolymer acts to reduce the efficiency of both droplet collision and film drainage and/or rupture.