The segmental orientation behavior of the thermoplastic elastomer [poly(butylene terephthalate-co-tetramethyleneoxide)] has been studied with infrared dichroism and polarizing microscopy. The orientation of hard segments as well as soft segments has been determined as a function of draw ratio. The difference in the orientation behavior of soft and hard segments has been associated with the respective glass transition temperatures. It has been also established that annealing significantly affects the deformation behavior. The segmental orientation has been observed to be strongly affected by the addition of small amount of the asymmetric chain extender. These results indicate that the crystalline structure of the hard segment can be significantly perturbed by the heterogeneity of the chain extender. The birefringence observed using the polarizing microscopy as a function of draw ratio correlates well with the orientation functions of hard segments rather than those of soft segments. It is known that pi electrons in the hard-segment structure affect the refractive index significantly. Thus chemical structure of each segment in phase-separated thermoplastic elastomer should be considered in order to properly interpret birefringence data.