Small particles of two steroids, cholesteryl acetate and beta-sitosterol, were prepared by the following technique. The steroid was dissolved in an organic solvent, which was emulsified in water in the presence of surfactant, thus giving a water-continuous emulsion. As the organic solvent was evaporated, the steroid precipitated. One particle was found to form in each emulsion droplet. Particle sizes down to 25 nm were obtained by this method. Particles were prepared from emulsions containing different organic solvents and surfactants, and the effect on the size and the colloidal stability of the particles was examined. The final particle suspension is relatively stable provided the initial emulsion is stable. Furthermore, there is a close correlation between the initial droplet size and the final particle size. The particle size, therefore, can be varied in the same manner as the size of emulsion droplets; that is, by changing the emulsification process parameters and the amount and choice of surfactant and the oil-to-water ratio. Finally, the particle size depends on the choice of solvent and only slightly on the concentration of drug in the oil phase of the emulsion.