This study provides an investigation on the effect of interfacial tension (IFT) and emulsification on displacement efficiency in dilute surfactant flooding. In previous studies, usually the surfactant concentration or type was changed to achieve different IFT levels. However, in this study, only one surfactant with a constant concentration of 0.2 wt% was used to obtain five surfactant formulations with different IFT levels of 10¹, 10⁻¹, 10⁻², 10⁻³, and 10⁻⁴ mN m⁻¹ by changing the salinity of the salt water to eliminate the influence of the surfactant concentration or type. The emulsifying rates of the five surfactant formulations were measured. The emulsion stability was evaluated by measuring the backscattering and transmission light using a Turbiscan LAB. It turned out that the five surfactant formulations had a unique characteristic that their emulsifying ability successively decreased with the reduction of the IFT. These five surfactant formulations were used to evaluate the effect of the IFT and emulsification on the displacement efficiency by core flooding experiments. The results indicated that the obtained additional displacement efficiency decreased with the increase of the emulsification ability but increased with the reduction of the IFT, which confirms that the lower the IFT, the higher the displacement efficiency in dilute surfactant flooding. Simultaneously, the reduction of the IFT might have a more important role on improving displacement efficiency for residual oil after water flooding than emulsification since the additional displacement efficiency decreased with the increase of emulsification.