The morphology of blends of polystyrene and polyethylene prepared by single screw extrusion and static mixing is shown to consist initially of sheets, which subsequently break up into droplets or threads. The rapid decrease of phase dimensions during blending can quantitatively be described by deformation of sheets in shear flow and not by deformation of droplets into threads. The final phase dimensions are found to be largely determined by the sheet thickness at the onset of break-up of the sheets. The type of morphology obtained after breakup can change during further processing without changing the phase dimensions significantly. At high values of the capillary number threads remain stable, whereas at low values droplets are formed. The final phase sizes appear to be almost independent of the capillary number.