Rubber-reinforced thermoplastics are produced commercially by dissolving a rubber in the monomer of a glassy polymer and commencing polymerization with a free-radical initiator. Beyond a few per cent conversion, the incompatibility of the two polymers causes a phase separation, with each phase containing one nearly pure polymer. Subsequent polymerization occurs in each phase. The heterogeneous nature of the reaction can influence both the kinetics of the reaction and the amount of grafting in the product. The fact that only monomer which polymerizes in the rubber phase can possibly graft establishes an upper limit to the amount of grafting and hence influences the mechanical properties of the product. It is shown theoretically how unequal partitioning of monomer and initiator between the phases can influence the extent of grafting, and can also explain the kinetic rate reductions which have been observed in such systems. The distributions of monomer and benzoyl peroxide and azobisisobutyronitrile initiators between the phases have been determined experimentally for a styrene–polystyrene–polybutadiene system. They cannot account for the rate reduction observed in such systems.