The polycondensation of polyesters from C-12 monomers at 95 degrees C in aqueous o/w emulsions, stabilized by acidic surfactants, has been studied in detail with a range of methods during the course of the reaction, resulting in a better understanding of the underlying reaction mechanisms. Comparisons of different surfactants, and effects of added NaCl, demonstrate that the reaction site is located at the interface between the hydrophobic core of the emulsion droplets and the surrounding water and that the reaction rate is dependent on the local concentration of oxonium ions at the reaction site. The equilibrium conversion achieved at long reaction times is, however, independent of the choice of surfactant or addition of salt, and the state of thermodynamic equilibrium is discussed thoroughly. Interestingly, a fraction of numerous "nanoparticles" (droplets in the size range <= 100 nm) have been found to develop in addition to the original fraction of droplets in the 10 mu m size range. It is suggested that these nanoparticles are formed when monomers dissolved in the aqueous phase undergo an acid-catalyzed reaction to generate water-insoluble oligomers. Once the nanoparticles are formed, the reactions in them proceed with a reaction mechanism similar to emulsion polymerization.