Star polymers with dynamic arm exchange are formed in water by self-assembly of amphiphilic diblock copolymers based on poly(ethylene oxide) end capped with a small hydrophobic block. The arm exchange was arrested in situ by photo-cross-linking of the core. The effect of dynamic arm exchange on the osmotic compressibility and viscosity was investigated systematically as a function of the concentration and temperature. The discontinuous liquid-solid transition reported for dense polymeric micelle suspensions was found to be preserved after dynamic arm exchange was arrested in situ. The effect of cross-linking and aggregation number on the liquid-solid transition was investigated.