Reactive blending of dissimilar polymers involves in situ reactions of functionalized components to form a block or graft copolymer at the interface between phases. The copolymer is believed to play a role of the emulsifier to prevent particle coalescence and to improve interfacial adhesion. A mixture of non-reactive polysulfone (PSU) and small amount of reactive PSU, phthalic anhydride-terminated PSU (PSU-PhAH), was melt-blended with polyamide (PA) at 65/35 (PSU/PA) wt ratio using a miniature mixer. When the molecular weight of PSU-PhAH was high (comparable with non-reactive PSU), PA particles were dispersed in PSU matrix and the particle size was much smaller than non-reactive system, suggesting the typical emulsifying effect caused by the in situ formed block copolymer. On the other hand, when the molecular weight of PSU-PhAH was much smaller than the non-reactive PSU, phase inversion took place; i.e. at early stages of mixing, PA particles were dispersed in PSU matrix; however, at later stages the PSU particles were dispersed in PA matrix. TEM observation showed a micelle formation in PSU particles. The phase inversion mechanism was discussed in terms of the increase in viscosity of PSU phase caused by the pull-out of the in situ formed block copolymers.