We report observations of two distinct types of phase‐separated microstructures in co‐deposited Al‐Ge films. In the initial stages of growth, lateral phase separation is observed, with a temperature dependence consistent with surface diffusion. As the film grows thicker, the Ge‐rich phase becomes increasingly buried, and a transverse phase‐separated microstructure results, consisting of an Al‐rich layer covering a Ge‐rich layer. This observation is explained in terms of the competition between surface and interfacial free energies. We discuss the kinetic aspects of the phase separation process, and the resulting behavior in the thick‐film limit.