The gelation behavior of a poly(ethylene-alt-propylene)-b-poly(ethylene oxide)-b-poly(N-isopropylacrylamide) (PON) triblock terpolymer and a poly(N-isopropylacrylamide)-b-poly(ethylene oxide)-b-poly(N-isopropylacrylamide) (NON) triblock copolymer was studied by rheology over the concentration range 1-5 wt %. In comparison to the NON copolymer, gelation of the PON terpolymer was achieved at a much lower concentration, with a much sharper sol-gel transition. This is due to a stepwise gelation of PON terpolymers involving micellization at room temperature and gelation at elevated temperatures. The separation of micellization and gelation leads to the formation of a two-compartment network as observed by cryoTEM. The results highlight the intricate and tunable nanostructures and new properties accessible from ABC terpolymer hydrogels.