The purpose of this paper is to investigate the relationship between the properties and catalytic activity of the third phase in a phase transfer catalytic system, The conditions of formation of the third phase are investigated by changing the kind of phase transfer catalyst (PTC), organic solvents, and concentration of potassium hydroxide in the aqueous phase. When tetrabutylammonium bromide, (Bu)(4)NBr. is used as the phase transfer catalyst, the third phase is formed with both dodecane and toluene as organic solvents. On the other hand, when tetrahexylammonium bromide, (Hex)(4)NBr, is used as the phase transfer catalyst, the third phase forms with dodecane but not with toluene. The volume of the third phase, the base strength, the concentration of catalyst, water, and organic solvent in the third phase were measured, Solidification phenomena are observed for some cases of higher KOH concentrations in the aqueous phase, Dehydrohalogenation of 2-bromooctane in the organic phase was carried out in a batch reactor with the potassium hydroxide solution in the aqueous phase. The observed reaction rate constant (k(obs)), which is determined from the first order kinetics, increases remarkably with the increase in concentration of KOH in the aqueous phase (xi(KOH)) for the condition of third phase Formation. However, for the solidification condition, the reaction rate drops sharply because only the external surface of the solid is effective for the reaction. The distribution coefficient of reactant between the organic phase and the third phase, (KA) and the reaction rate constant in the third phase (k(third)) can be related to the concentration of water in the third phase(C-H2O) independent of the catalysts and organic solvents. Since PTC exists in the third phase, it can be reused without any loss of catalytic activity.