The microstructure of segmented block copoly(ether esters) composed of poly(tetramethylene oxide) (PTMO) "soft" blocks and poly(butylene terephthalate) (PBT) "hard" blocks was investigated. A variety of analytical techniques, including C-13 solid-state NMR, infrared spectroscopy, dynamical mechanical analysis, dielectric spectroscopy, differential scanning calorimetry, and transmission electron microscopy, were applied. The samples vary in the amount (35-60 wt %) and block length (1000-2000 g/mol) of the soft component. It is generally assumed in the literature that copoly(ether esters) have a two-phase structure consisting of a crystalline PET phase surrounded by an: amorphous phase which is a homogeneous mixture of PTMO soft segments and amorphous PET segments. Our experimental results reveal that the amorphous phase is not a homogeneous mixture of "hard" and "soft" segments but consists of a highly mobile "PTMO-rich phase" and a less mobile "PBT/PTMO mixed phase". The extent of microphase separation in the amorphous phase appeared to be strongly dependent on the block length and composition. Those samples that revealed a strong microphase separation showed strain-induced crystallization of the soft segments upon mechanical deformation.