Canadian oil sands represent a huge oil resource. Stable water-in-oil (W/O) emulsions, which persist in Athabasca oil sands from surface mining, are problematic, because of clay solids. This article focuses on the characterization of water-in-diluted-bitumen emulsions by nuclear magnetic resonance (NMR) measurement and the transient behavior of emulsions undergoing phase separation. An NMR restricted diffusion experiment (pulsed gradient spin-echo (PGSE)) can be used to measure the emulsion drop-size distribution. Experimental data from PGSE measurements show that the emulsion drop size does not change much with time, which suggests that the water-in-diluted-bitumen emulsion is very stable without an added coalescer. The sedimentation rate of emulsion and water droplet sedimentation velocity can be obtained from NMR one-dimensional (1-D) T-1 weighted profile measurement. Emulsion flocculation can be deduced by comparing the sedimentation velocity from experimental data with a modified Stokes' Law prediction. PR5 (a polyoxyethylene (EO)/polyoxypropylene (PO) alkylphenol formaldehyde resin) is an optimal coalescer at room temperature. For the sample without fine clay solids, complete separation can be obtained; for the sample with solids, a rag layer that contains solids and has intermediate density forms between the clean-oil and free-water layers. Once formed, this rag layer prevents further coalescence and water separation.