The development of heterogeneous structure during the polymerization of a polyurethane system using a polyether diol of M̄n = 2000 as the soft segment and 4,4′‐diphenylmethane disocyanate extended with 1,4‐butanediol as the hard segment was monitored following the amount of light transmitted by the sample and the increase in viscosity of the reacting mixture. The amount of light transmitted by the reacting sample was observed to decrease sharply at a given point in the reaction. The cloud point was taken as the onset of phase separation in the system and the number average sequence at this point was found to be fairly constant at about 1.3 independent of reaction temperature and system composition. In many cases, the cloud point occurred at quite low conversion, meaning that a significant amount of subsequent polymerization occurs in a heterogeneous medium. It was also found that the viscosity of the material reached very large values at partial conversions of the monomers and presented throughout the reaction values larger than those expected from an increase in molecular weight alone. Viscosity is apparently sensitive to a different aspect of the phase separation process than the light transmission.