Water-soluble terpolymers of acrylamide, acrylic acid and N-[(4-decyl)phenyl]acrylamide have been synthesized by a micellar polymerization technique. Neutralization of the acid groups after polymerization yields hydrophobically modified polyelectrolytes. The ratio of the surfactant to the hydrophobic comonomer (SMR) was varied in successive polymerizations to yield a series of terpolymers with varied amphiphilic microstructures. Although each terpolymer in the series was identical in overall composition and molecular dimensions, profound differences in associative behaviour were observed. Terpolymers synthesized at low SMR exhibit large enhancements in viscosity owing to hydrophobic associations in 0.5 M NaCl. Those synthesized at high SMR behave in a similar fashion to a control acrylamide/acrylic acid copolymer. While viscometric studies indicate associative thickening behaviour, pyrene probe fluorescence studies fail to indicate the presence of well-organized hydrophobic microdomains.