The effect of processing conditions (essentially the flow conditions) on the morphology of incompatible, immiscible polymer blends was investigated. In simple shear flow the steady-state morphology, that is, droplet size, of such lends is a single-valued function of the shear rate whenever a critical shear rate is exceeded. Below this critical value it becomes very difficult to reach a dynamic equilibrium between droplet breakup and coalescence, which gives rise to a hysteresis region for the size of the inclusions. Such regions were identified and studied for model-blend systems. The critical shear rate decreases with increasing concentration of the droplet phase. A large ratio of droplet over matrix viscosity seems to have the opposite effect. The hysteresis region is bounded by the critical curves for droplet breakup and coalescence. The accessibility of this region can therefore be used to evaluate models for the said phenomena in nondilute systems Droplet breakup is nearly independent of droplet concentration while elasticity of the dispersed phase seems to facilitate breakup. As expected, coalescence is enhanced by higher concentrations. Droplet elasticity induces a certain degree of "rigidity" to the interface, and therefore the mobile interface model for coalescence is not suitable for such systems.