We performed a series of experiments to study the effect of a chain transfer agent, n-dodecyl mercaptan (n-DM), on the development of morphology in composite latex particles. The morphologies were determined using a combination of transmission, electron microscopy, differential scanning calorimetry, and surfactant titration. The polymer molecular weights were reduced up to 10-fold with n-DM levels up to 1.4% in the monomer. The addition of n-DM can increase the extent to which second-stage polymer domains are formed within the interior regions of the seed particles, but this is only expected under specific conditions. Numerical simulations support this conclusion. We also observed that the reduction in the molecular weight of the second-stage polymer did not significantly increase the extent of phase separation and morphology rearrangement within the particles. The overall effect on the morphology was limited. (c) 2006 Wiley Periodicals, Inc.