When polymer blends are prepared from a mixture of pellets, the melting order of the components is important in determining the mechanism of morphology development. Here, we show that an inversion of phase continuity occurs during processing when a minor phase component has a softening or melting transition temperature which is lower than the softening temperature of the major phase component. Three 80:20 concentration systems were studied: polyarylate/rubber, polyamide 6,6/polystyrene, and polystyrene/ethylene propylene rubber. Initially, the minor phase was the continuous phase and coated the major phase in all three systems. As the major phase melted, a switching of phase continuity occurred, and in the final blend state, the major phase was the continuous phase. An increase in power input was required during the switching of the dispersed and matrix phases. The compounding process was studied through continuous video monitoring, torque-temperature analysis, and microscopy of quenched samples. A continuity inversion mechanism is proposed. It is found that the initial morphology of the blend consists of sheets of the major phase inside the minor phase. These sheets break up into irregularly shaped particles, which then coalesce around the minor phase. The effects of compatibilization (using reactive polymers or adding a premade diblock) on the rheology and morphology of the blend are also investigated. Interfacial reaction is seen to delay and intensify the inversion of phase continuity, whereas addition of premade diblock does not have any significant effect. The torque increases due to interaction of the major phase domains and due to reactive stabilization of the interface against coalescence, and the contributions of each to the torque can be decoupled.