The present work investigates the effects of kaolinite on viscosity and surface tension of water-in-oil (W/O) emulsions formed from an Omani heavy crude oil and steam. In Oman, steam flooding is widely used as tertiary means to recover untapped heavy oils. However, the production of sludge along with residual oil is one of the major issues faced in the field. An Omani heavy oil (API gravity of 21.5 degrees) enriched with kaolinite at the fixed concentration of 10 wt % was used to form W/O emulsions by steam injection. Rheological properties of generated emulsions were investigated over the temperature range of 30-80 degrees C. Not only was the presence of fine particles (kaolinite) found to alter the viscosity of W/O emulsions (about 20% lower than that without kaolinite), but also kaolinite clay particles induced a thixotropic behavior of W/O emulsions. The latter observation was thought to be subsequent to a chemistry occurring upon the contact between kaolinite particles and condensed water. At a fixed concentration of kaolinite, the W/O emulsion viscosity was found to decrease with the increase in the water/oil ratio (WOR). A reverse trend was seen for emulsion formed without the presence of kaolinite. This study has also highlighted the potential of kaolinite to alter the wettability of a formation from oil-wet to water-wet with steam-condensed water.