The biphasic alkaline hydrolysis of ethyl caprylate, which has attracted attention as a prototype reaction for the so-called self-reproduction of micelles (Bachmann, P. A.; et al. Nature 1992,357, 57), was shown to give rise to kinetic bistability in a continuous flow stirred tank reactor. At higher flow rates, the stationary state composition was characterized by a turbid two-phase oil/water mixture, while at lower flow rates a single transparent aqueous phase was obtained. For intermediate residence times, either situation may be attained depending on the initial conditions in the reactor. Near the hysteresis Limits, the characteristic increase in relaxation times was observed. A macroscopic model, which accounts for the nonlinear behavior in terms of micelle-mediated phase transfer, predicts the bistability, and the observed transient kinetics are in good agreement with the experimental results.