The phase separation of a dilute aqueous high molecular mass polyethylene oxide (PEO) solution was studied by viscosity measurements as a function of temperature. Upon phase separation, the PEO-water system exhibited drastic changes in its theological behavior. Above a certain temperature, the viscosity of the PEO solution did not decrease with increasing temperature but instead remained constant. This certain temperature corresponded to the cloud point temperature (CPT) of the PEO-water system. By increasing the level of shear, the CPT was shifted to lower levels. The degree of suppression was found to depend on the PEO and Na2SO4 concentrations. Aggregation of phase-separated PEO was studied by particle size measurements using the laser diffraction technique. During the aggregation, the PEO aggregates reached an equilibrium size. Deviation of the system temperature from the CPT was found to be the driving force for the aggregation process. The enhancement in the flocculation of clay particles by PEO upon phase separation was demonstrated. With increasing deviation from the CPT, the flocculation was faster and with a larger equilibrium floc size.