The crystallization and melting behavior of poly(c-caprolactone) (PCL) in a physically confined system, self-assembly blends of poly(ε-caprolactone)/polystyrene-b-poly(ethylenepropylene) (PCL/ PS-PEP), were studied by differential scanning calorimetry (DSC). The glassy PS-rich phases effectively confine the PCL crystallization due to the localization behavior of PCL where the PCL component appears to be localized in between the lamellae-like microdomains of PS block. Macrophase-separated and microphase-separated morphology were both identified in the self-assembly blends. The crystallization rate of PCL is strongly affected by the phase-separated morphology. The effective confinement on crystallization occurs while the size of lamellae-like confinement goes below submicrometer. Under effective confinement, the crystalline chains of PCL appear in random orientation at low crystallization temperature and in parallel orientation at high crystallization temperature as evidenced by simultaneous small-angle X-ray scattering and wide-angle X-ray diffraction experiments. Furthermore, the PCL crystals form multilayer-like crystalline morphology under confinement as evidenced by transmission electron microscopy. On the basis of Avrami treatment, the crystallization kinetics of PCL in a physically confined system and of PCL homopolymer were both studied for comparison. Similar to the PCL homopolymers, the crystallization of localized PCL chains under confinement exhibits a heterogeneous nucleation process. Recognizable melting depression was identified for PCL under confinement whereas significant decrease on relative crystallinity was observed for PCL chains crystallized at higher temperature. As a result, the changes of the crystallization and melting behavior are indeed attributed to the effect of confinement that is strongly dependent upon the spatial size of confinement. Contrary to typical microphase-separated morphology of crystallizable block copolymers (designated as chemically confined system for crystallizing blocks), the unique phase-separated morphology as a physically confined system for the crystallization of PCL provides a representative system for understanding the behavior of crystallization under spatial confinement from tens of nanometers to submicrometers.