The blends of poly(hydroxyether of bisphenol A) (phenoxy) and poly(vinyl acetate) (PVAc) were prepared through in, situ polymerization, i.e., the melt polymerization of diglycidy ether of bisphenol A (DGEBA) and bisphenol A in the presence of PVAc. The polymerization reaction started from the initial homogeneous ternary mixture of PVAc/DGEBA/bisphenol A; the phase separation induced by reaction occurred as the polymerization proceeded. The phenoxy/PVAc blends with PVAc content up to 20 wt % were obtained and were further characterized by the solubility, Fourier transform infrared spectroscopy (FTIR), differential scanning calorimetry (DSC), dynamic mechanical analysis (DMA), and scanning electronic microscopy (SEM). The results indicate that no intercomponent reaction occurred during the in situ polymerization. All the blends display separate glass transition temperatures (Tg's); the very fine phase-separated morphology was obtained by this polymerization blending method. Mechanical tests show that the prepared blends exhibited substantial improvement of mechanical properties, especially in impact strength, which could be ascribed to the formation of the fine phase-separation morphology during in situ polymerization. The thermogravity analysis (TGA) of the blends showed that the thermal stability of the PVAc-rich phases in the blends was enhanced in comparison to the pure PVAc due to the synergistic contribution of the two phases in energy transportation.