Abstract: A coalescer system (10) for oil-in-water soluble oil emulsions utilized as coolants and cutting oils for machining processes in industrial plants, comprises a deep bed of granular hydrophilic media particles (24) to effect coalescence of insoluble soaps and reverse phase water-in-oil droplets. The coalesced insoluble soaps and reverse phase emulsions flow to the liquid surface in tank (12) along with other contaminants that have an affinity for the reverse phase oil droplets and insoluble soaps, all in the form of floating waste (26). The waste (26) is then discarded. Effluent coolant may be transported back into the cooling system. The system (10) increases the stable life of the oil-in-water emulsion, minimizes the formation of foam, and removes other abrasive or otherwise harmful nonhomogeneous contaminants from the soluble oil emulsion.