The effect of water on the flow behavior of glass microspheres dispersed in mineral oil was investigated for various levels of water, particle volume fractions, and particle sizes. The addition of small amounts of water leads to large increases in viscosity due to the formation of water bridges between particles that give rise to capillary forces between the particles. The capillary forces between the particles also make the flow profile highly shear-thinning across the range of particle volume fractions that were studied (0.10 to 0.25). The presence of water leads to a significant effect of particle size, and the viscosity of dispersion goes through a maximum as the amount of water is increased. Two hydrophobic surfactants, Span 80 and Arquad 2HT, were found to reduce the viscosity of the dispersions with added water, but the mechanism and extent of viscosity reduction differed. (C) 2010 American Institute of Chemical Engineers AIChE J, 57: 2334-2340, 2011