Dynamic contacting experiments were conducted in which drops of short-chain alcohols were injected into dilute aqueous solutions of tetradecyldimethylamine oxide (C(14)DMAO) and the resulting behavior was observed using videomicroscopy. At neutral values of pH the L(3) (sponge) and the L(alpha) (lamellar) phases formed successively as intermediate phases during the experiments. Most of the observed behavior could be explained in terms of the equilibrium phase diagrams and a quasi-steady-state diffusion model which is a generalized version of one developed previously, Although the drops shrank in the early part of the experiments owing to diffusion of alcohol into the aqueous phase, they began to grow once the L(3) phase formed because incorporation of surfactant and water exceeded alcohol losses, Even though no convection was observed, a striking rapid expansion occurred when equilibrium conditions at the interface between the L(3) phase and the aqueous solution dictated that the former incorporate water at a rate much faster than the rates at which surfactant diffused into or alcohol diffused out of a drop, Indeed, the drops seemed to explode as their surfaces became irregular, apparently due to formation of a highly dilute lamellar phase which grew extremely rapidly as myelinic figures, At low pH where the surfactant was cationic, only a lamellar intermediate phase was seen, evidently because the charged bilayers were too rigid to form the L(3) phase.