The diffusional processes which occur when oil contacts an aqueous surfactant solution have been investigated. These are important in enhanced oil recovery by surfactant flooding, where the rate of phase equilibration can affect recovery efficiency. Also, they are pertinent to certain mechanisms of detergency. Experimentally, systems containing anionic surfactants and alcohol cosurfactants were studied by optical microscopy. A microscope which utilized a vertical sample orientation was specifically designed for this purpose. As a result, an Improved and detailed viewing of intermediate phase growth, interface velocities, and spontaneous emulsification was achieved. The conditions of interest ranged from low salinities at which the surfactant is water-soluble to high salinities at which it is oil-soluble. At low salinities, the initial aqueous solution was a dilute dispersion of liquid crystals in brine. After oil was gently brought into contact, an intermediate oil-in-water microemulsion began to form. Also, an increase in liquid crystal concentration was observed at the microemulsion interface. At intermediate salinities, where the surfactant solution was mostly liquid-crystalline, a brine phase and a middle-phase microemulsion were both formed. It was in this salinity range that spontaneous emulsification of brine drops in the oleic phase began to occur. At high salinities, only a brine phase formed between the initial phases. Myelinic projections slowly developed at the liquid crystal-brine interface and changed in size and shape as diffusion proceeded. These salinity conditions produced vigorous spontaneous emulsification of brine in oil. In some systems, the brine phase formed by diffusion was more dense than the liquid-crystalline phase below it. Brine would channel to low points and push liquid crystal up to the' oil interface. The points at which liquid crystal contacted the oil produced volcano-like instabilities where mass transfer was enhanced. Not unexpectedly, these systems equilibrated much more rapidly than those in which diffusion predominated. The theory of diffusion paths, extended to allow for diffusion in a dispersed-phase region, was used to solve the diffusion equations for a model, pseudo-ternary system. As a result, the calculated diffusion paths and interface velocities were used to qualitatively explain the various phenomena observed experimentally.