In this Article, the morphological evolution in the blend thin film of polystyrene (PS)/poly(ε-caprolactone) (PCL) was investigated via mainly AFM. It was found that an enriched two-layer structure with PS at the upper layer and PCL at the bottom layer was formed during spinning coating. By changing the solution concentration, different kinds of crystal morphologies, such as finger-like, dendritic, and spherulitic-like, could be obtained at the bottom PCL layer. These different initial states led to the morphological evolution processes to be quite different from each other, so the phase separation, dewetting, and crystalline morphology of PS/PCL blend films as a function of time were studied. It was interesting to find that the morphological evolution of PS at the upper layer was largely dependent on the film thickness. For the ultrathin (15 nm) blend film, a liquid-solid/liquid-liquid dewetting-wetting process was observed, forming ribbons that rupture into discrete circular PS islands on voronoi finger-like PCL crystal. For the thick (30 nm) blend film, the liquid-liquid dewetting of the upper PS layer from the underlying adsorbed PCL layer was found, forming interconnected rim structures that rupture into discrete circular PS islands embedded in the single lamellar PCL dendritic crystal due to Rayleigh instability. For the thicker (60 nm) blend film, a two-step liquid-liquid dewetting process with regular holes decorated with dendritic PCL crystal at early annealing stage and small holes decorated with spherulite-like PCL crystal among the early dewetting holes at later annealing stage was observed. The mechanism of this unusual morphological evolution process was discussed on the basis of the entropy effect and annealing-induced phase separation.