This Report outlines scientific issues that involve microscopic phenomena in multiphase flows. A common theme is the need to understand the coupling between molecular scale phenomena and macroscopic phenomena. Phenomena to be discussed include boiling nucleation, contact line motion, flow regimes in microchannels, breakup and coalescence of fluid particles and jets, atomization and sprays, and the effects of surface-active molecules and drag-reducing polymers. (C) 2003 Elsevier Ltd. All rights reserved.