Abstract: The mechanism of phase inversion emulsification process (PIE) was studied for waterborne dispersion of highly viscous epoxy resin using non-ionic polymeric surfactants. Drop deformation and breakup, rheological properties, conductivity, and particle size measurements reveal the micro-structural transition amid emulsification. It is revealed that strong flow causes water drop to burst with the formation of droplets and huge interface. Phase inversion corresponds to an abrupt rheological transition from a type of viscous melt with weak elasticity to a highly elastic type of aqueous gel. This implies that the phase inversion equivalent to a curvature inversion. Based on this, a geometric model is postulated to correlate process variables to the particle size. The coverage and conformation of the surfactant plays key role for the particle size of the final emulsion. The interactions of thermodynamic and hydrodynamic effects are also discussed. It is concluded that the thermodynamics control the PIE while the hydrodynamics drives the creation of interface and involves every step of PIE.