The phase behavior and mesoscopic inhomogeneities in the ternary system of tertiary butyl alcohol (TBA), water, and propylene oxide (PO) have been studied by static and dynamic light scattering, gas chromatography, mass spectrometry, and molecular dynamics simulations. Mesoscale inhomogeneities are observed in this system in a broad range of PO concentrations, from 0.02 to about 65 mass %, and at certain TBA/water mass ratios varying from about 3/97 to about 30/70. This TBA/water composition domain corresponds to a region where short-lived micelle-like molecular clustering and thermodynamic anomalies are observed in the TBA water binary system. At dilute PO concentrations (0.02 to about 1 mass %) the mesoscale inhomogeneities are Brownian diffusive droplets, with a size of the order of a hundred nanometers. We hypothesize that these droplets have a hydrophobic core enriched by oily impurities and oligomerized PO molecules. A hydrogen-bonded layer of TBA, water, and PO molecules surrounds this hydrophobic core. At high PO concentrations (beyond 50 mass %), the interfacial curvature of the mesoscopic inhomogeneities changes its sign and the exteriors of these inhomogeneities become hydrophobic. The inversion of the internal curvature may result in the formation of a spongelike bicontinuous mesoscale structure at intermediate PO concentrations. This mesostructure appears to be at a nonequilibrium state, although extremely long-lived.