Dynamics of puffing and micro-explosion phenomena occurring in ternary fuel emulsion droplets under high temperature environment were explored using high speed backlight imaging technique. A single droplet composed of diesel-biodiesel-ethanol emulsion was placed at the tip of a 75 mu m gauge thermocouple and introduced rapidly into a furnace maintained at 500 degrees C. Several interesting features such as oscillation of suspended droplets, physical transformations occurring within the droplet, vapour expulsion, puffing, micro-explosion, sheet formation, perforations, growth of perforations, sheet disintegration and rotation of secondary droplets were observed. High resolution image analysis revealed separation of emulsion components within the core of the suspended droplet, which appeared either as a single nucleus or multiple nuclei. Two distinct types of micro-explosion were identified. For droplets encountering a single nucleus at the core resulted in a stronger vapour expulsion followed by intense micro-explosion. For droplets having multiple nuclei at the core resulted in a weaker vapour expulsion and slower growth of droplet prior to micro-explosion. Both types of micro-explosion process resulted in a number of child droplets. For the case of strong vapour expulsion nearly 80% of its child droplets have their sizes distributed within 150 mu m compared to 60% for weaker vapour expulsion. The child droplets that were generated from the primary events of both puffing and micro-explosion cascaded further into secondary and tertiary events of puffing and micro-explosion in freely suspended environment.