This report reviews the literature on emulsion formation and stability. The applicability of different homogenizers that can be used to make emulsions is discussed. The influence of temperature, amount of energy supplied during homogenization, composition of dispersed and continuous phases on droplet size formation during homogenization is reviewed. The most stable emulsions are with small and narrow droplet size distribution. Increasing amount of energy supplied during homogenization can reduce the size of droplets in emulsions. However, optimal energy density should be used as overprocessing can lead to particle aggregation. The emulsifiers in emulsions are used to decrease the surface tension of oil / water interface and reduce the energy necessary to apply for disruption of droplet during homogenization. Properties of emulsifiers, used in food industry, are overviewed. Physical instability of emulsions results from high level of energy stored as interfacial free energy. Creaming, flocculation, coalescence and Ostwald ripening are examples of physical instability of emulsions and their quantitative descriptions are reported. Oxidative stability of emulsion can be influence by homogenization process, as the increase of temperature, oxygen incorporation, high shear stress applied during homogenization promote lipid oxidation. Composition of lipid and water phases also is shown to be an important factor for oxidative stability of emulsions.