Phase behavior, solubilization, and phase transition of a microemulsion system stabilized by a castor oil-based novel surfactant (sodium methyl ester sulfonate) and cosurfactant (propan-2-ol) were investigated for effective application in oil recovery processes. A pseudoternary phase diagram showed the existence of different phases (S/L phase, Winsor I, Winsor Winsor III, and Winsor IV) by conventional titration method. With an increase in the cosurfactant-to-surfactant ratio (Kcs), the region under the Winsor III phase was found to increase. An increase in cosurfactant content in the system mixture improved interactions of the surfactant with oil and water in the microemulsion phase, thereby reducing molecular aggregations in solution. At optimal salinity, equal amounts of oil and water were solubilized in a microemulsion in the Winsor III systems and showed ultralow interfacial tension (IFT) values on the order of 10(-8) to 10(-4) mN/m. Phase dilution studies revealed that the microemulsion systems formed were thermodynamically stable. Salinity increased the relative phase volume of a middle-phase microemulsion, whereas an increase in water content reduced the middle phase volume fractions in the Winsor III systems. Phase transition data were analyzed and fitted using empirical relationships. An increase in salinity and brine content caused phase transformation from Winsor I to Winsor II via Winsor III. However, an increase in temperature showed reverse phase transformation from Winsor II to Winsor III.