We investigate the structural evolution of an A/B/C ternary mixture in which the A and B components can undergo a reversible chemical reaction to form C. We developed a lattice Boltzmann model for this ternary mixture that allows us to capture both the reaction kinetics and the hydrodynamic interactions within the system. We use this model to study a specific reactive mixture in which C acts as a surfactant, i.e., the formation of C at the A/B interface decreases the interfacial tension between the A and B domains. We found that the dynamics of the system is different for fluids in the diffusive and viscous regimes. In the diffusive regime, the formation of a layer of C at the interface leads to a freezing of the structural evolution in the fluid; the values of the reaction rate constants determine the characteristic domain size in the system. In the viscous regime, where hydrodynamic interactions are important, interfacial reactions cause a slowing down of the domain growth, but do not arrest the evolution of the mixture. The results provide guidelines for controlling the morphology of this complex ternary fluid. (C) 2004 American Institute of Physics.