Temperature modulated alternating differential scanning calorimetric studies show that Se rich Ge 0.15 Se 0.85−x Ag x ͑0 ഛ x ഛ 0.20͒ glasses are microscopically phase separated, containing Ag 2 Se phases embedded in a Ge 0.15 Se 0.85 backbone. With increasing silver concentration, Ag 2 Se phase percolates in the Ge-Se matrix, with a well-defined percolation threshold at x = 0.10. A signature of this percolation transition is shown up in the thermal behavior, as the appearance of two exothermic crystallization peaks. Density, molar volume, and microhardness measurements, undertaken in the present study, also strongly support this view of percolation transition. The superionic conduction observed earlier in these glasses at higher silver proportions is likely to be connected with the silver phase percolation.