Recent advances in the combustion of water fuel emulsion which consists of base fuel and water doped with or without a trace content of surfactant are reviewed. The focus is on the fundamental mechanism relevant to the micro-explosion phenomena leading to the secondary atomization which is not common to the combustion of pure fuel. Described at first are the kinetic model and the probability model for predicting the nucleation of vapor bubbles in the liquid phase, and the measured and predicted results of the superheat limit of hydrocarbons and water beyond which the liquid phase cannot exist. This is followed by the micro-explosion phenomena of emulsion confined in a glass capillary aiming to suppress the heterogeneity of temperature profile and the bulk flow inside it, and the evaporation at its surface during the period of time prior to the micro-explosion. The evaporation and the combustion of emulsion droplet are among the primary subjects in the present paper. Discussed are the phenomenological burning processes, the burning rate constant, the ignition process, the flame phenomena including soot concentration profile in the droplet flame and the spheroidal evaporation on a hot surface. Also mentioned are die in-droplet transfer processes including the phase separation, the micro-explosion phenomena, the conditions for the micro-explosion to occur and the empirical equation for the rate of micro-explosion based on the probability model. Finally stated is the effect of water emulsification on the flame structure, the combustion efficiency and the exhaust emissions in laboratory spray combustor and the various practical combustion applications. (C) 2002 Elsevier Science Ltd. All rights reserved.