Many cosmetic, food, and pharmaceutical applications rely on emulsions. Emulsions are thermodynamically unstable systems containing two immiscible liquid phases. In emulsion, one phase is dispersed as globules in another phase. Creams, ointments, gels, and pastes are emulsions that are commonly used for the delivery of drugs. Simple water-in-oil (W/O) emulsions contain hydrophilic drugs, while hydrophobic drugs are encapsulated within the oil droplets of oil-in-water (O/W) emulsions. The primary objective is to protect the drug and bioactive substances, thus increasing the bioavailability. Emulsions intended for oral use can mask the drug’s bitter taste, while the topical delivery increases the permeability of bioactive agents. For pharmaceutical applications including taste masking and vaccine adjuvants, multiple emulsions or double emulsions such as water-in-oil-in-water (W/O/W) and oil-in-water-in-oil (O/W/O) are attractive systems. These emulsions have smaller droplets in the dispersed phase that are composed of the same components as the external phase. The variations in droplet size of the dispersed phase leads to the formation of microemulsion and nanoemulsions. Microemulsions are a dispersion of oil, water, and an amphiphile. They are optically isotropic and thermodynamically stable dispersions of either W/O or O/W types. Microemulsions act as multifunctional carriers in addition to tailoring nanoparticles. Miniemulsions, nanoemulsions, ultrafine emulsions, and submicron emulsions are defined as emulsions with droplet sizes between 20 and 200 nm. These emulsions are clear because of the small droplets of the dispersed phase, unlike coarse emulsions that appear milky. Emulsification refers to the process of formation of emulsions. The aim of emulsification is to make a stable system of two immiscible phases. The droplet size in a conventional emulsion grows with time leading to a separation of phases. Therefore, a third substance such as stabilizers or emulsifiers is added during the emulsification for long-term stability. Emulsifiers, which include phospholipids, polysaccharides, proteins, small molecule surfactants, and other surface-active polymers, are often amphiphilic compounds with both hydrophobic and hydrophilic groups on the same molecule. The stability of an emulsion is defined by the capability of the phases to remain mixed together and maintain their properties. The stability of such systems is dependent on the dispersed phase’s droplet size, droplet size distribution, and differences in density, volume, and viscosities of the dispersed as well as continuous phase. An emulsion may lose its stability through coalescence, creaming, cracking, phase inversion, flocculation, and Ostwald ripening. Several theories have been proposed for the formation of stable emulsions considering the various factors and emulsifying agents used. These theories explain the behavior and action of the emulsifiers at the interface of two immiscible liquids. Some of these theories may be applicable to specific emulsifying agents under some specific circumstances such as pH and proportion of both continuous and dispersed phases. Molecular adsorption of small and large molecules to the droplet surface reduces the aggregation of the dispersed phase. The emulsion stability is thus improved by the formation of a protective film around the drop. This chapter discusses recent advances in emulsion types, theories of emulsification, formulations, and stability aspects of these biphasic systems.