A typical agricultural chemical spray process involves atomizing a liquid stream of diluted pesticide solution through hydraulic spray nozzles that inherently produce a wide spectrum of spray droplet sizes. Finer droplets have higher potential of off-target movement or drift, which is of concern due to their potential impacts on neighboring crops and livestock, sensitive ecological resources, and human health. Research by the Spray Drift Task Force and others has demonstrated that although spray nozzle selection and application parameters are the key factors to produce the desired droplet size spectrum, the physical properties of the spray solution have significant effects on the droplet size distribution for various kinds of nozzles. One of these properties of many spray fluids is the inclusion of an oil phase in the form of emulsions. The effect of oil-in-water emulsions on spray droplet size distribution has been demonstrated by previous work. However, the mechanisms of this effect are largely unknown. In this study, a model system of polyvinyl alcohol emulsified methylated soybean oil in water was created in a series of spray solutions. The effects of emulsion particle size, dynamic surface tension, and oil phase viscosity were studied systematically, and atomization mechanism hypotheses were proposed. It was proposed that the shear rate provided by the spray process can deform and elongate the emulsion droplets inside the nozzle but may not be sufficient to break them. The elongated emulsion droplets then recover when the spray jet sheet exits the nozzle, which presents localized oscillation frequency irregularities and causes perforation and early breakup of the jet sheet. This study will help in the design of agricultural spray nozzles and the optimization of antidrift spray additives.