The effects of solvents and salts (including base) on the formation of a third liquid phase, distribution of catalyst, reaction mechanism and reaction rate in the reaction between n-butyl bromide and sodium phenolate (NaOPh) with tetrabutylammonium bromide (QBr) as a phase transfer catalyst were investigated. The organic solvents used include chlorobenzene, toluene and hexane while sodium bromide and sodium hydroxide were tested in the study of salt effects. The effect of NaOPh concentration was also investigated. The results reveal that the kind of solvent and the amount of NaOH added are two important factors influencing the formation of a third liquid phase, the distribution of catalyst and the reaction rate. It is found that NaBr and NaOH can force QBr (or QOH) out from the aqueous phase to the organic phase or to form a third liquid phase depending on whether the organic solvent is polar or nonpolar. NaOH also has the ability to extract reversely QOPh from the organic phase or the third liquid phase to the aqueous phase. In some cases, however, a third liquid phase will appear when a large amount of NaOH is added. Based on the experimental findings, three types of reaction schemes are proposed for such complicated phase transfer catalysis systems.