The ultrafast, optically-heterodyne-detected optical Kerr effect has been used to investigate the dynamics of the dispersed oil phase of a novel oil-in-water microemulsion. The carbon disulfide-dodecyltrimethylammonium bromide-water (CS2-DTAB-H2O) system has been characterized by viscosity and conductivity measurements. The results of these measurements are discussed in terms of possible shape changes and interparticle interactions. Ultrafast measurements are reported for several different compositions of the microemulsion. The results are compared and contrasted with the dynamics of neat CS2 and CS2 dissolved in n-alkanes. The dynamics Of CS2 dispersed in the microemulsion do not approach those of the neat liquid in any case, even at the highest possible loading, implying that the dynamics in the oil phase are strongly perturbed by the surfactant. The slow (picosecond) diffusive reorientation of the CS2 does not reflect the macroscopic viscosity of the microemulsion.