This paper describes the development of modified hydrophobic membranes for osmotic distillation (OD) which are tolerant to oily feeds. Three commercial membranes were chosen as substrates including the Celgard 2500, Millipore GVSP and the UPVP. The focus has been on using PVA coatings which were found to have an insignificant effect on flux. For concentrated sucrose solutions, flux was reduced significantly by viscosity-related concentration polarisation effects. The presence of the coating did not increase this effect, suggesting that the flux limitation mostly occurred adjacent to the feed-side of the laminate and not within the top-layer or inside the pores. The laminate membrane is a necessity for oily feeds since the uncoated membranes were promptly wetted out even for low concentration of oil (limonene) dispersion in water. The laminate membranes were all stable in oil emulsions when tested for periods up to 24 h; i.e. the membranes did not wet out during flux measurement and no visual damage nor coating detachment was observed for laminates. These observations confirm the efficacy of having coated membranes for OD of oily feeds.