Static light scattering was used to study the phase separation behavior of homopolystyrene and polystyrene-b-poly(acrylic acid) (PS-b-PAA) in DMF as a function of added water content. It was found that the critical water content (cwc), at which phase separation starts, depends on both the polymer concentration and the molecular weight. The higher the polymer concentration and the molecular weight, the lower the cwc. For PS homopolymer, phase separation involves the precipitation of the polymer chains. In the copolymer solution, phase separation results in the formation of regular crew-cut micelles consisting of a PS core and a PAA corona; thus, it is preferably referred to as microphase separation. The change of the micelle fraction as a function of water addition can be estimated from the relationship between the cwc and the initial copolymer concentration. The influence of added electrolytes, i.e., NaOH, HCl, NaCl, CaCl2, or Ca(Ac)(2), on the self-assembly process of the copolymers in DMF was also explored. Since the micelle cores are highly swollen by DMF in the early stages of their formation, the structures are labile. As the added water content increases, the cores become gradually less swollen and the mobility of the polymer chains in the cores decreases. A study of polymer chain exchange among the micelles was performed by mixing two solutions of micelles of different sizes at different water contents and studying the micelle core size distribution by transmission electron microscopy. It is shown that the copolymer chain exchange within a 1 day period is significant at a water content of 6 wt %, but becomes negligible when the water content is increased to similar to 11 wt %.