Emulsion formulations used for in vitro compartmentalization (IVC) methods were found to be incompatible with protein expression in the rabbit reticulocyte (RRL) system, causing rapid discoloration and translation shutdown. Here we identify possible causes and describe a novel water-in-oil emulsion which abolished discoloration and allowed high-level in-emulsion expression of active luciferase and human telomerase using the RRL. This novel emulsion greatly expands the range of potential protein targets for IVC.