We have studied morphology and kinetics of phase separation and dewetting in thin films of polystyrene and poly(vinyl methyl ether) blend on glass substrate using light scattering (LS) and optical microscope (OM) techniques as well as using atomic force microscopy (AFM). As the film thickness decreases from several tens mu m, a peak in LS profiles characteristic to phase separation once disappears at the film thickness of similar to 1 mu m, which corresponds to the characteristic wavelength of phase separation. Below this film thickness, we found dewetting is triggered in addition to the phase separation. In thin films below about 100 nm a scattering peak is again observed, which has been assigned to the characteristic wavelength of the dewetting. The results are discussed in terms of the characteristic wavelength of phase separation in relation to the film thickness.