We investigate morphology evolution under melt blending of an immiscible mixture of two polymers, to which small amounts of a block copolymer are added as an emulsifier. We demonstrate the effect on blend morphology of an exothermic interaction between the major component, which constitutes the continuous matrix, and the compatible segment of the block copolymer. The system studied comprises poly(styrene-co-acrylonitrile) (SAN) as the matrix, poly(cyclohexyl methacrylate) (PCHMA) as the minor component, and poly(styrene-b-methyl methacrylate) (PS-b-PMMA) as the emulsifier. The degree of exothermic interaction between the SAN random copolymer and the PMMA segment of PS-b-PMMA was increased by changing the acrylonitrile content from 33% to 26%. To facilitate migration of the block copolymer to the blend interface, it was first coprecipitated with the minor phase and then dry-mixed with the major component. The spatial distribution of the PS-b-PMMA could be observed by selective staining of the PS segment, thereby allowing qualitative analysis of the surface activity of the block copolymer. The specimens were subjected to shear mixing in parallel plate geometry at a high shear rate to produce small droplet sizes, and then droplet coalescence was observed subsequently at a low shear rate. The addition of a block copolymer decreases the rate of droplet coalescence. The emulsified blend containing SAN26 had smaller droplets under high shear and slower droplet coalescence under low shear. These observations are consistent with the dual expectation that the exothermic mixing increases the swelling of the PMMA segment, which lowers interfacial tension, and leads to a more rigid interface.