Phase relationships in concentrated solution and in the bulk of a solvent/rigid-rod/flexible-coil system were investigated. The solvent was a mixture of two strong acids. The rigid-rod polymer was poly-p-phenylenebenzobisthiazole (PBT). The flexible-coil polymer was poly-2,5(6)benzimidazole (ABPBI). The concentrated solution and bulk morphologies were investigated by means of polarized optical microscopy, small-angle light scattering, scanning electron microscopy, and wide-angle x-ray diffraction techniques. Above a critical concentration, Ccr, the pseudo ternary solution separated into two coexisting phases, one optically anisotropic (liquid crystalline) and the other isotropic. The anisotropic domains were highly birefringent. They contained primarily the PBT macromolecules oriented perferentially along a domain axis. Numerical values of Ccr, determined experimentally, were in good agreement with calculated predictions. Aggregates composed of PBT molecules were observed to be dispersed in a continuous matrix for vacuum-cast films. These results strongly indicate the dominance of entropic effects in the thermodynamics of rigid-rod/flexible-coil polymer mixtures. The feasibility of processing these novel mixtures into “molecular level composites” (molecular composite) having rigid-rod molecules or small bundles of these rod molecules dispersed in a continuous flexible-coil matrix is demonstrated. These composites possess excellent tensile properties and may be “tuned” to virtually any desired combination of their composite properties; for example, uniaxial modulus, ultimate tensile strength, and elongation.