This study reports an experimental investigation on hydrodynamics and mass transfer characteristics in a 15.6x10(-3) m(3) external loop airlift reactor for oil-in-water micro-emulsions with oil to water volume ratio (phi) ranging from 3% to 7% (by volume). For comparative purposes, experiments were also carried out with water. Increase in phi of micro-emulsion systems results in an increment in the gas holdup and a decrease in the volumetric gas-liquid oxygen transfer coefficient and liquid circulation velocity, attributed to the escalation in the viscosity of micro-emulsions. The gas holdup and volumetric mass transfer coefficient for micro-emulsion systems are significantly higher than that of water system. Two correlations are developed to predict the gas holdup and oxygen transfer coefficient.