A new concept of micro-channel contactor-separator is developed for operation with immiscible liquids. It has potential for application with micro-reactors or for mass transfer operations. A prototype device is made in glass using a photo-chemical etching process, including etching across a gap to produce sections of shallow channel. It is tested using oil and water, and the behaviour studied using a microscope in conjunction with a digital video camera. The basis of operation is to use a simple T-junction to produce slugs of typically the oil phase in the water phase. The slugs then flow along a straight channel toward a separation section, which consists of small side channels running perpendicular from the main channel. The side channels carry water to the water outlet, whilst the oil flows out along the main channel. The side channels have a restricted opening where they join the main channel and the extra interfacial force at this point is intended to prevent the oil phase from entering. The operating conditions over which the system operated successfully were determined experimentally. These were found to agree reasonably well with conditions predicted based on CFD analysis. (c) 2007 The Institution of Chemical. Engineers. Published by Elsevier B.V. All rights reserved.