Considerable research has been performed on polymeric systems that exhibit liquid crystalline or mesomorphic behavior. The principal reason for this effort was that these materials might be developed as ultrahigh strength materials. Jackson and Kuhfuss from Tennessee Eastman demonstrated that liquid crystalline behavior existed in copolymers based on poly(ethylene terephthalate) (PET) and para-hydroxy benzoic acid (ABA). However, intricate details pertaining to the polyesterification kinetics have remained unexamined. Structural elucidations have generated conflicting data for the system. The C-13 NMR(16) and high-temperature X-ray diffraction indicate a random behavior of PET and oxybenzoate. Thermal analyses have implied an inclination towards nonrandom assembly. Similarly, optical and electron microscopy examinations, coupled with data from X-ray and conventional electron microscopy endorse the existence of ordered domains of lamellar 4-oxybenzoate blocks in the PET/80 ABA copolyester. The cooling of a biphasic melt is known to trigger a biphasic structure [4]. Transesterification reactions between poly(ethylene terephthalate) PET, and acetoxybenzoic acid (ABA) were conducted using the melt polymerization technique to understand the transesterification kinetics of a phase segregated system. The transesterification kinetics of two compositions PET 20/80 (ABA) and PET 10/90 (ABA) have been studied at 260, 275, 290 and 305 degrees C using dibutyl tinoxide (0.1 mole percent) as a catalyst. Then the homopolymerization of acetoxy benzoic acid was studied at similar temperatures and catalyst concentration. Few assumptions were made to simplify the kinetic analysis. (1) ABA homopolymerises to form acetic acid and higher oligomers. The oligomers add on to a PET chain to give a copolymer or PET/ABA, the product of interest. (2) The reaction between PET and ABA proceeds in a heterogeneous two-phase system consisting of a ABA rich and poor phase. The reaction sequence would be: (i) ABA reacts with itself to form oligomers of varying chain length and (ii) The subsequent addition of the oligomers onto the PET chain. The reaction sequence is assumed to be valid for ABA rich and poor phase. Both the reactions are assumed to be second order with respect to the reactants. Moles of acetic acid found experimentally are computed using a standard procedure. The rate constant k is determined. The role of the catalyst is also evaluated.