Multiple emulsions are complex polydispersed systems where both oil in water and water in oil emulsion exists simultaneously which are stabilized by lipophilic and hydrophilic surfactants respectively. The ratio of these surfactants is important in achieving stable multiple emulsions. Among water-in-oil-in-water (w/o/w) and oil-in-water-in-oil (o/w/o) type multiple emulsions, the former has wider areas of application and hence are studied in great detail. Formulation, preparation techniques and in vitro characterization methods for multiple emulsions are reviewed. Various factors affecting the stability of multiple emulsions and the stabilization approaches with specific reference to w/o/w type multiple emulsions are discussed in detail. Favorable drug release mechanisms and/or rate along with in vivo fate of multiple emulsions make them a versatile carrier. It finds wide range of applications in controlled or sustained drug delivery, targeted delivery, taste masking, bioavailability enhancement, enzyme immobilization, etc. Multiple emulsions have also been employed as intermediate step in the microencapsulation process and are the systems of increasing interest for the oral delivery of hydrophilic drugs, which are unstable in gastrointestinal tract like proteins and peptides. With the advancement in techniques for preparation, stabilization and rheological characterization of multiple emulsions, it will be able to provide a novel carrier system for drugs, cosmetics and pharmaceutical agents. In this review, emphasis is laid down on formulation, stabilization techniques and potential applications of multiple emulsion system.