The phase diagram of a water/polyoxyethylene(50.8) oleyl ether (C18:1EO50.8)/m-xylene system was constructed at 25 degrees C. In the binary water/C-18:1EO50.8 system, an aqueous micellar(W-m) phase and a discontinuous cubic (I-1) phase form. In the relatively dilute region, an excess oil phase separates from these phases upon addition of m-xylene. In the concentrated region, however, the I-1 phase changes to a lamellar (L-alpha) phase via hexagonal (H-1) and bicontinuous cubic (V-1) phases with increasing oil content. According to the effective cross-sectional area of one surfactant molecule alpha(s) in the liquid crystals calculated from the small-angle X-ray scattering (SAXS) data, the curvature of the surfactant molecular layer remains positive in the dilute region although m-xylene molecules penetrate into the surfactant palisade layer. The penetration effect of m-xylene is large and the I-1-H-1-V-1-L-alpha phase transition takes place in the concentrated region, because the hydration of the EO chain decreases. However, the negative surfactant curvature is not attained due to the steric hindrance of the very long polyoxyethylene chain. Consequently, the L-alpha phase solubilizes a large amount of oil and very stable reverse vesicles form in the oil-rich region. The L-alpha phase does not appear and the reverse Vesicles are not formed in C18:1EO50.8 system upon addition of decane due to the weak tendency of the oil penetration.