The in situ polymerization of bisphenol-A-carbonate cyclic oligomers (BPACY)/styrene-acrylonitrile copolymer (SAN) blends has been demonstrated to yield PC/SAN blends with morphologies unattainable via conventional melt blending. Extremely fine phase dispersion can be obtained by this method of blend preparation. Domain-coarsening kinetics have been shown to be quite sensitive to the volume fraction of the dispersed phase. The ’pinning’ of domain coarsening, unique to polymer systems, can be attributed to the extreme barriers to diffusive coarsening mechanisms in these systems. Thus, phase coarsening is arrested when percolation ceases or domains no longer form local clusters. The dispersed phase size has been shown to have a dramatic effect on high-stress deformation in systems where a brittle phase is dispersed in a more compliant ductile matrix. The increased ductility of blends with finer phase dispersions has been rationalized based on a lower tendency for smaller brittle phases to craze and crack in addition to the influence of complex local stress fields in heterogeneous materials.