Purpose. Aim of the study is to explore the viscoelastic properties of intermediate liquid crystalline (LC) phase formed during self-emulsification and to evaluate its influence on self-emulsification performance. Methods. Binary system of tween 80 (T80) and imwitor 742 (I742) was used and different SES were prepared with I742 at 10, 30, 50, 70 and 90% w/w concentration levels. Self-emulsification was monitored by visual observations and droplet size measurement. Mesophases obtained by 50% v/v aqueous hydration of SES were utilized for polarizing microscopy, differential scanning calorimetry and rheological studies. Results. SES 30% presented good emulsifying properties and nano-size droplets were observed after its emulsification as compared to micron sized droplets for other SES. In polarizing microscopy, formation of intermediate LC phase was observed in all SES. Lamellar phase was evident in 30% SES while other SES exhibited micellar cubic phase. Presence of high level of structurally bound water in thermal analysis confirmed mesophase formation in all SES. In frequency sweep, decrease in elastic modulus, an increase in phase degree and loss tangent was observed for 30% SES. Exactly opposite trend was seen in other SES. Thus, rheological studies concluded presence of weak and fragile mesophase structure in 30% SES while LC phase structure with little structural buildup was observed in other SES. This weak mesophase structure in SES 30% presented no or very little resistance against strain induced deformation. Therefore, during emulsification, weak mesophase in SES 30% ruptured with ease and released jet of nano-size droplets compared to coarse droplets for other SES. Conclusion. This study signifies the effect of viscoelastic properties of intermediate LC phase on self-emulsification performance.