Abstract The crystallization behaviour of PBT and a 50 50 polycarbonate (PC)-poly(butylene terephthalate) blend with added transesterification catalyst were studied using differential scanning calorimetry (d.s.c.) and synchrotron small angle X-ray scattering (SAXS)/wide angle X-ray scattering (WAXS)/d.s.c. PBT crystallization was inhibited in the blend by both the presence of PC and transesterification. Increasing transesterification resulted in a progressive reduction in the melting and crystallization temperatures and degree of crystallinity, with the development of a mixed-phase glass transition at around 90°C. Transesterification also induced a significant change in blend morphology, from a coarse (5–10 μm) bicontinuous structure, when uncatalysed, to a sub-micron bicontinuous structure at low degrees of reaction.