Thermosetting blends of a biodegradable poly(ethylene glycol)-type epoxy resin (PEG-ER) and poly(epsilon-caprolactone) (PCL) were prepared via an in situ curing reaction of poly(ethylene glycol) diglycidyl ether (PEGDGE) and maleic anhydride (MAH) in the presence of PCL. The miscibility, phase behavior, crystallization, and morphology of these blends were investigated. The uncured PCL/PEGDGE blends were miscible, mainly because of the entropic contribution, as the molecular weight of PEGDGE was very low. The crystallization and melting behavior of both PCL and the poly(ethylene glycol) (PEG) segment of PEGDGE were less affected in the uncured PCL/PEGDGE blends because of the very close glass-transition temperatures of PCL and PEGDGE. However, the cured PCL/PEG-ER blends were immiscible and exhibited two separate glass transitions, as revealed by differential scanning calorimetry and dynamic mechanical analysis. There existed two phases in the cured PCL/PEG-ER blends, that is, a PCL-rich phase and a PEG-ER crosslinked phase composed of an MAH-cured PEGDGE network. The crystallization of PCL was slightly enhanced in the cured blends because of the phase-separated nature; meanwhile, the PEG segment was highly restricted in the crosslinked network and was noncrystallizable in the cured blends. The phase structure and morphology of the cured PCL/PEG-ER blends were examined with scanning electron microscopy; a variety of phase morphologies were observed that depended on the blend composition. (C) 2004 Wiley Periodicals, Inc.