Abstract: A process for producing a microencapsulated system comprising the steps of: (a) emulsifying a solution of color precursor in a solvent as a first internal phase and a diluent as a second internal phase in an external phase to produce discrete droplets of each of said first and second phases; and (b) encapsulating said droplets, is disclosed. A recording sheet is also disclosed which comprises a substrate having a layer of microencapsules containing a color precursor solution and microcapsules containing a diluent. Preferably the microcapsules are clusters of gelatin capsules.