Polyampholyte hydrogels (PA gels) are drawing great attention for their excellent mechanical properties including self-healing, high toughness, and fatigue resistance. These mechanical performances are found to be attributed to the hierarchical structure of the PA gels, consisting of reversible ionic bonds at the 1 nm scale, permanent polymer network at the 10 nm scale, and bicontinuous phase network at the 100 nm scale. In this work, we systematically studied the phase network formation of these gels aiming to answer the following three questions: (1) how the phase separation occurs? (2) what determines the phase structure? and (3) is this structure in thermodynamic equilibrium or not? Our results show that the phase separation occurs during dialysis of counterions from the gels and it is driven by the Coulombic and hydrophobic interactions. The phase size d(0) and the number of aggregated chains in a unit cell of the phase structure n scale with the molecular weight of the partial chain between permanent effective cross-linking M-eff as d(0) similar to M-eff and n similar to M-eff(2), respectively. A chemical cross-linker and topological entanglement suppress phase separation, while hydrophobic interaction favors phase separation. An intrinsic correlation between the polymer density difference (Delta rho) between two phases and d(0) is observed (Delta rho similar to d(0)(2)) as a result of the competition between the driving force to induce phase separation and the resistance to suppress the phase separation. The phase-separated structure is metastable, which is locally trapped by strong intermolecular interactions.