Variation in the enthalpic interaction of a block copolymer (bcp) at the phase boundary between immiscible homopolymers is demonstrated to strongly modulate the critical micelle concentration, the interfacial activity, and the emulsifying power, by tracing morphological transformations using transmission electron microscopy (TEM). Moreover, the theory of micellization by Leibler et al. is modified to account for such interaction. Specifically, it is demonstrated that, while incompatibility between a bcp segment and a homopolymer drives the bcp to the interface (increases interfacial activity), exothermic mixing reduces interfacial activity. However, when the bcp is interfacially active, exothermic mixing can enhance interfacial wetting (emulsifying power). In addition, we show that too strong a swelling of an interfacially-active bcp block by the major blend component can cause a reduction in emulsifying power. Solution-cast blends of poly(styrene-co-acrylonitrile) (SAN) with polystyrene (PS) as a minor component and emulsified with poly(methyl methacrylate-b-styrene) (PMMA-b-PS) were investigated. Three molecular weights of PMMA-b-PS (65, 283, and 680 kDa) were used. The exothermic mixing between SAN and PMMA and the repulsion between SAN and PS were systematically varied by changing the AN content of the SAN from 15 to 26, 29, and 33%. We find that the degree of incompatibility N-chi SAN-PS, the molecular weight ratio M(b)/M(b) of PS homopolymer to-PS bcp segment, and the degree of exothermic mixing between SAN and PMMA are all important in determining the morphology of the disperse phase.