Controlling the morphology of thin films is key in optimizing the efficiency of polymer-based photovoltaic (PV) devices. The morphology and interfacial behavior of the multicomponent active layers confined between electrodes are strongly influenced by the preparation conditions. Results obtained in this work quantitatively show the photovoltaic device performance is strongly affected by the nanoscopic morphology, crystal orientation, composition distribution and the interdiffusion behavior of the photoactive layer. To better understand the physics of the photoactive layer in the organic photovoltaic devices, it is necessary to gain a quantitative understanding of the morphology and the manner in which it develops. A key element in the kinetics associated with the structure development is the interdiffusion of the components. To that end we used poly(3-hexylthiophene) (P3HT) / [6,6]-phenyl C61- butyric acid methyl ester (PCBM) bilayers as a model to investigate the interdiffusion of the components and its role in the development of the morphology. A detailed description of the diffusion behavior and the morphology developed from a layer of P3HT in contact with a layer of PCBM during thermal annealing is given. Amorphous P3HT and PCBM are shown to be highly miscible and PCBM can penetrate into the P3HT layer through the P3HT amorphous region and form the bulk heterojunction structure within a few second of annealing at 150 oC. The results indicated that one phase is a pure P3HT crystal domain and the other phase is the mixture of amorphous P3HT and PCBM, which is not consistent with a phase separation of the components by a spinodal decomposition mechanism. We put forth an alternative mechanism, namely a competitive crystallization/diffusion argument, to describe the origin of the morphology. These findings provide new insights and guidance in the generation of active layers in organic photovoltaics that are crucial in enhancing the device performance. Textured organic solar cells were also studied, providing another route to fabricate higher performance devices.