An intensive study has been undertaken on the damping mechanism of chlorinated butyl rubber (CIIR) and phenolic resin (PR) vulcanized blends. Evidence from morphology observations of blend sections by scanning electron microscopy, extraction experiments, molecular weight analysis by gel permeation chromatography indicates that except a part of PR crosslinked with CIIR, the others remain linear and disperse in the CIIR matrix to form a two-phase continuity. The tan delta curves of blend without striking peak split from the dynamic mechanical spectra and inward shift of glass transition of linear PR suggests that cured CIIR and linear PR is miscible to a certain extent, thus, the phase separation in the blends can be described as slight phase separation. There observations are interpreted in terms of variations of free volume characterized by positron annihilation lifetime spectroscopy.