When a single–phase liquid is cooled into the miscibility gap, it decomposes into two liquid phases. Generally the liquid–liquid phase transformation causes the formation of a solidification microstructure with serious phase segregation. Many efforts have been made to use the liquid–liquid demixing phenomenon for the production of the finely dispersed metal–metal composite materials. It is demonstrated that the only effective method of preventing the formation of the microstructure with heavy phase segregation in monotectic alloys is using the rapid solidification processing techniques. Strip casting may have great potentials in the manufacturing of the bulk materials of this kind of alloys. In this paper, a model was developed to describe the microstructure formation in a strip cast monotectic alloy based on the population dynamic method. The model takes into account the concurrent actions of the nucleation, diffusional growth and motions of the minority phase droplets. The model was nmerically solved together with the controlling equations for the heat transfer, mass transport and momentum transfer to studthe microstructure development in the strip cast Al–Pb alloys. The effects of alloy composition, solidification velocity and melting temperature on the microstructure formation were investigated. The results indicate that with the increase of the solidification velocity, the nucleation position of the minority phase droplets moves towards the solidification interface, the nucleation rate and number density of droplets increase and the average droplet size decreases. All these are favorable for the formation of a well dispersed microstructure. With the increase of the Pb content,  the nucleation position of the minority phase droplets moves away form the solidification interface, the nucleation rate decreases, and the average droplet size increases. These are against the formation of a well dispersed microstructure. With the increase of the melting temperature, the nucleation rate and number density of droplets increase and the average droplet size decreases. These are favorable for the formation of a well dispersed microstructure. But the velocity of the minority phase droplets decreases with the increase of the melting temperature. When the velocity of droplets is negative, samples can not obtain steady state solidification and result in the formation of a microstructure with massive segregation.