Abstract A great deal of attention has been paid to energy saving devices in place of conventional air-cooled and water-cooled devices. The thermal energy storage system that uses the latent heat of a PCM (phase change material) for air-conditioning or heating has recently become popular because it does not require high electric power and it saves energy. An emulsion dispersed nano-size particles of phase change material is produced. We discuss with the thermophysical properties, the stability of emulsion, and the heat transport characteristics as a thermal functional fluid. The testing emulsion, which has nano-size particles as the discrete phase, is produced with a d -phase emulsification method. The diameter of discrete phase in the emulsion is measured for evaluation of the long-term stability of emulsion. In addition, the DSC (differential scanning calorimetry) curve of emulsion is determined. Thermophysical properties such as viscosity and thermal conductivity of emulsions were studied in this work, and was compared with that of the base fluid. The results reveal that the emulsion with the d -phase emulsification method has the superior stability. From the differential thermal analysis, the DSC curve of present emulsion indicates a discontinuous change at the phase change temperature of phase change material due to its latent heat.