In this work, the phase separation of an epoxy-functionalized hyperbranched polymer (HBP) in a blend with a conventional epoxy resin is examined. Morphology development with the advancement of curing reaction was investigated by hot-stage polarized optical microscope, where it was found that HBP is miscible in epoxy resin solvent at 120 degrees C and undergoes phase separation during the curing reaction, leading to a two-phase microstructure which maintains a dispersed morphology up to 20 wt % HBP. The degree of phase separation and morphology were also investigated using differential scanning calorimetry, and the resultant microstructure was confirmed by atomic force microscopy. The epoxy/HBP blends were characterized by positron annihilation lifetime spectroscopy for their free volume characteristics where behavior typical of miscible blends was seen, likely due to chemical bonding between the two phases. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 117: 557-564, 2010