To increase the T-g in combination with a retained crystallization rate, bis(2-hydroxyethyl)terephthalate (BHET) was incorporated into poly(butylene terephthalate) (PBT) via solid-state copolymerization (SSP). The incorporated BHET fraction depends on the miscibility of BHET in the amorphous phase of PBT prior to SSR DSC measurements showed that BHET is only partially miscible. During SSP, the miscible BHET fraction reacts via transesterification reactions with the mobile amorphous PBT segments. The immiscible BHET fraction reacts by self-condensation, resulting in the formation of poly(ethylene terephthalate) (PET) homopolymer. H-1-NMR sequence distribution analysis showed that self-condensation of BHET proceeded faster than the transesterification with PBT. SAXS measurements showed an increase in the long period with increasing fraction BHET present in the mixtures used for SSP followed by a decrease due to the formation of small PET crystals. DSC confirmed the presence of separate PET crystals. Furthermore, the incorporation of BHET via SSP resulted in PBT-PET copolymers with an increased T-g compared to PBT. However, these copolymers showed a poorer crystallization behavior. The modified copolymer chain segments are apparently fully miscible with the unmodified PBT chains in the molten state. Consequently, the crystal growth process is retarded resulting in a decreased crystallization rate and crystallinity. (c) 2007 Wiley Periodicals, Inc.