The oily sludge generated from the pretreatment step of the used lubricating oil re-refinery is characterized as a complex and tight water/oil emulsion with water content varying from 38 to 77 wt.%. Removal of water is necessary for the emulsion to be fed into the processing line. Freeze/thaw method proves to be effective, with near 90% of water removed. An optimal freezing temperature was found to be around the point where water droplets were all frozen, about -40 degreesC in this case. Sufficient freezing time is required for the removal of water to reach its maximum value. The best thawing conditions found are either in ambient air or in water bath at a temperature below 20 degreesC. The water separated from the emulsion contains some organic chemicals with chemical oxygen demand (COD) being 10 000-15 000 mg/l. The demulsification is achieved due to the expelling of surfactant molecules from the ice lattices during freezing and the forming of surfactant micells during thawing. (C) 2002 Elsevier Science B.V. All rights reserved.