A diffuse interface model is used to simulate a step-shear experiment of a binary immiscible polymer blend. The gradient theory used in diffuse interface modeling makes it possible to incorporate interfacial tension and governs the process of coalescence and breakup without any additional decision criteria. The interface tensor q, a direct outcome of the model, is used to relate microstructural information to the first-normal stress difference N1. The results obtained are in qualitative agreement with experiments reported in the literature.