Microdomain structures and phase transitions in binary blends consisting of a highly asymmetric block copolymer and a homopolymer were investigated using transmission electron microscopy (TEM), small-angle X-ray scattering (SAXS), and oscillatory shear rheometry. For the study, a polystyrene-block-polyisoprene-block-polystyrene copolymer (Vector 4111) was mixed with a low molecular weight polystyrene (PS), where Vector 4111 has a 0.16 volume fraction of PS blocks. TEM images show that during heating from room temperature each of the binary blends prepared (86/14, 73/27, 62/38, and 49/51 Vector 4111/PS) exhibits "distorted microdomains" that have lost long-range order and yet have retained a distinct interface before reaching the micelle-free (or microdomain-free) homogeneous phase. SAXS measurements show that, during heating, each of the binary blends first undergoes lattice disordering transition and then demicellization transition. Following the terminologies introduced in our recent paper (Macromolecules 2000, 33, 3767), lattice disordering/ordering transition (LDOT) is a transition where ordered microdomains, during heating, transform into distorted microdimains (micelles without long-range order) and the micelles transform, during cooling, into ordered microdomains, and demicellization/micellization transition (DMT) is a transition where the micelles disappear, during heating, transforming into the micelle-free homogeneous state and micelles are formed, during cooling, from the micelle-free homogeneous phase. Analysis of SAXS results enabled us to determine the LDOT temperature (T-LDOT) and DMT temperature (T-DMT). It was found that the T-DMT determined by SAXS agreed well with those determined by oscillatory shear rheometry and that the addition of PS to Vector 4111 lowered the T-DMT of the block copolymer, the extent of which increased with increasing amounts of PS added. It is concluded. that a simple theological study is not sufficient in order to unambiguously determine different transitions in highly asymmetric block copolymer and its blends with a homopolymer and that it is imperative to combine rheological measurements with structural investigation.