The heat capacity or reversing heat flow signal from modulated-temperature differential scanning calorimetry can be used to measure the onset of phase separation in a poly(vinylmethylether)/water mixture, clearly showing the special type III lower critical solution temperature demixing behavior. Characteristic of this demixing behavior is a three-phase region, which is detected in the nonreversing heat flow signal. Stepwise quasi-isothermal measurements through the phase transition show large excess contributions in the (apparent) heat capacity signal, caused by demixing/remixing heat effects on the timescale of the modulation (fast process). These excess contributions and their time-dependent evolutions (slow process) are useful in understanding the kinetics of phase separation and the morphology (interphase) development. Care has to be taken, however, in interpreting the heat capacity signal derived from the amplitude of the modulated heat flow because nonlinear effects lead to the occurrence of higher harmonics. Therefore, the raw heat flow signal for quasi-isothermal demixing and remixing measurements is also examined in the time domain. (C) 2003 Wiley Periodicals, Inc.