A series of cationic polyacrylamides (CPAMs) with different charge densities have been prepared via the stabilizer-free two-phase copolymerization of acrylamide (AM) and 2-methylacryloyayethyl trimethylammonium chloride (DMC) in the aqueous solution of poly(ethylene glycol) (PEG). Systematical investigations were carried out on the role of electrostatic interactions in the phase separation, product stability, and droplet formation. It was found that, with the introduction of a DMC unit into the polyacrylamide chains, the critical conversion and stability of the product greatly improved and the droplets of the final dispersion became smaller and more uniform. Scanning electron microscopy and zeta-potential results indicated that two growth stages and a transition stage existed in the droplet formation and growth process, and the aggregation degree of droplets in the transition region was controlled by the electrostatic repulsion. The cationic copolymer acted as a stabilizer in the stabilizer-free two-phase copolymerization process, which facilitated the formation of smaller and more uniform droplets. A novel four-step mechanism for the droplet formation and growth was proposed, which could illustrate the role of electrostatic interactions in the stabilizer-free aqueous two-phase copolymerization system.