The block copolymer formation from the exchange reaction between polycarbonate (PC) and poly(ethylene-co-butylene) diol (POH) occurring during melt mixing was studied. The exchange reaction proceeded by the attack of active chain ends of hydroxyl-terminated POH on the inner carbonate groups of PC. The reaction was accelerated in basic condition in the presence of a hindered amine. The formation of block copolymer was confirmed by H-1-NMR analysis. The proceeding of the exchange reaction was analyzed with IN spectrometry by measuring the absorbance at 285 nm of the less-reactive phenolic end group of PC oligomers produced. The reaction was terminated when the hydroxyl end groups of POH were completely consumed. It was found from the analyses by GPC and DSC that the exchange reaction between PC and POH takes place rather uniformly by random scission of the chain. The block copolymer obtained here will be employed as a compatibilizer of PC/polyolefin blends in a future study.