Enriching the injection water with CO2 has demonstrated encouraging results to improve oil recovery and securely store CO2 in underground oil reservoirs. However, the mutual interactions taking place between carbonated water and reservoir oils are not fully understood. Assuming that the phase behaviour of free CO2 and oil phase that takes place during conventional CO2 flood will also take place during carbonated water injection (CWI) would be misleading. Recently, it has been visually demonstrated that CO2 transfer from carbonated water into a “live” crude oil would trigger the formation of a new gaseous phase, which would hugely boost the performance of CWI under real reservoir conditions. Therefore, characterization of this new phase would have significant implications for identifying the suitable conditions at which CWI displaces the oil more efficiently. In this study, through a series of multiple-contact tests linked to micromodel and slim tube experiments, it has been aimed to comprehensively investigate; (i) CW-oil phase behaviour, (ii) the characteristic of gaseous new phase, and (iii) its impact on oil recovery by CWI, (iv) CW displacement front propagation inside the reservoir as CW moving far from injection point. We have studied the interactions between CW and live crude oil (crude oil with solution gas) by performing a series of high-pressure high-temperature fluid characterization tests. The live oil was sequentially brought into contact with CW and in each contact, the resultant phases were analysed to track the CO2 transfer between different phases and to determine the composition and characteristics of the new phase. The results revealed that the new phase forms immediately when live oil is brought into contact with the CO2-enriched water and it grows at subsequent contacts. The results of gas chromatography analyses also reveal that the new phase is composed of a multi-component mixture of hydrocarbons starting with CH4 and CO2 at early stages and becoming richer in CO2 towards latter contacts. Alongside the multiple-contact experiment, direct visualisation experiments performed at identical conditions confirm the rapid formation and growth of the new phase for the live oil system. Furthermore, to assess CW-live oil phase behaviour and displacement front propagation over long distances inside the reservoir, two carefully designed slim tube experiments were performed to compare the performance of secondary CWI against the conventional waterflooding in a one-dimensional long porous medium. The results of the slim tube tests showed that CWI led to an average improved oil recovery of 24% compared to conventional water flood. The outcomes of this integrated investigation unravel the characteristic and impact of the new phase formation on improved oil recovery by CWI. This would enable us to identify and target suitable reservoirs for this EOR technique.