Rheo-optical techniques are used here to probe the development of the morphology in transparent polymeric emulsions. The evolution of the droplet geometry is monitored in situ by means of linear conservative dichroism and flow small-angle light scattering (SALS). An interrupted step-up in shear rate is used to generate distorted droplets. Once the flow rate is stopped the droplets can relax either by retraction or by breakup. These relaxation mechanisms can be distinguished by the techniques used here, and structural relaxation times can be derived from either dichroism or light scattering experiments. During filament breakup the SALS pattern exhibits two secondary streaks that can be associated with capillary instabilities. From the kinetics of the corresponding relaxation, the breakup time of the fibrils can be estimated. The combination of size information derived from light scattering experiments with breakup times deduced from dichroism measurements or SALS experiments also provides a new rheo-optical method for estimating the interfacial tension in transparent immiscible blends.