We report the first successful reversible addition-fragmentation chain transfer inverse microemulsion polymerization (RAFT-IMEP). The inverse microemulsion (IME) system conditions were optimized by generating pseudo-three-component phase diagrams. The IME consisted of the hydrophilic monomer N,N-dimethylacrylamide (DMA), water, hexanes, nonionic surfactants, and a cosurfactant. The polymerization kinetics and the living character of RAFT-IMEP, conducted with varying amounts of dispersed aqueous phase, were similar to that observed for aqueous RAFT polymerization of DMA. The colloidal stability during polymerization was also investigated via dynamic light scattering. Decreasing the weight fraction of the dispersed aqueous phase leads to an increase in colloidal stability and a decrease in microemulsion size. An increase in the dispersity of molecular weight is also observed with a decrease in the weight fraction of dispersed aqueous phase. This observation is attributed to uncontrolled polymer that forms during the early stages of RAFT-IMEP. Chain extension or block copolymer formation is accomplished by simple addition of DMA or DEA to the polyDMA macroCTA, demonstrating the potential utility for preparing doubly hydrophilic block copolymers under appropriate RAFT/IMEP conditions.