The phenomena associated with phase separation via spinodal decomposition (SD) and nucleation of binary and ternary partially miscible solvent systems are discussed. Micro flow visualizations were also conducted to follow the drop formation and dynamics during the phase separation. The possibility of using the unique characteristics of phase transition in such systems for enhancing convective heat transfer rates was tested. Experiments show that with phase separation the convective heat transfer coefficients can be augmented by a factor of up to 2.2 compared to heat transfer rates obtained in single phase flow (without phase separation). In the case of free convection from a cylindrical surface, the heat transfer coefficients were found to be augmented by up to 100% compared to free convection in single phase liquid. The various mechanisms responsible for the heat transfer enhancement during phase separation are discussed.