The mechanism of water-soluble oligomer formation during the emulsion terpolymerization of styrene/butadiene/acrylic acid differs depending on whether the surfactant concentration is above or below the cmc. A growth mechanism for the water-soluble oligomers involving reactions in both the aqueous and organic phases for polymerizations carried out above the cmc of SLS is proposed. This is used to explain why the fraction of butadiene (Bu) units in the water-soluble oligomer chains is the highest compared to the styrene or even the acrylic acid (AA), despite the low water solubility of Bu monomer relative to AA. The supporting evidence for this mechanism includes (1) the increase in the oligomer molecular weight with increasing initiator concentration, as in the case of polymerization occurring in micelles, indicating that the oligomers had grown in an isolated organic phase, and (2) the much higher fraction of AA homodyads found in the oligomers formed at an SLS concentration below the cmc compared to that above the cmc. These results indicate that, in the absence of micelles, the oligomers will grow in the aqueous phase and result in more AA block dyad sequence units in the oligomer chains, owing to the higher AA monomer concentration there. When micelles exist, the water-soluble oligomers will grow in both the aqueous phase and the organic phase. In this case, fewer AA dyads will be noted.