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One recently reported application of microemulsions is as a fire-resistant hydraulic fluid where efficacy and stability depend among other factors upon the water-solubilizing capacity of the microemulsion and on the relative concentration of the surfactant. A model for such a microemulsion system has been studied using cryo-transmission electron microscopy (cryo-TEM), ¹H NMR self-diffusion, and small angle X-ray (SAXS) and neutron scattering (SANS). The phase behavior of the system containing a 1:1:2 oil:alcohol:surfactant weight ratio is characterized by a single continuous microemulsion region starting from a solution containing no water and approaching the water corner. Along this dilution line, a structural transition sequence:  oil drops → short range, noncontinuous lamellar microstructure → weakly hydrated aggregates is inferred as the water concentration is decreased. The local lamellar microstructure, i …