Traditional oil-in-water or water-in-oil emulsions depend on the separation of oil from water. Here, we report a fundamentally new class of water-in-water (w/w) emulsion where water droplets solvating a small non-amphiphilic organic molecule are coated by polymers that are also solvated in water. The small molecules, disodium cromolyn glycate (DSCG), form a liquid crystal phase in the droplet, in which the optical axes align either perpendicular or parallel to the surface of the droplet, depending on the chemical nature of the polymer. We argue that this novel phase is primarily stabilized by (i) the separation of molecular interactions in the droplets from those in the carrier phase albeit all solvated in water, and (ii) the multivalent interaction between the polymer and the surface of the droplet that leads to a coating of polymer. To further study this unique molecular partitioning in water, we hypothesize that certain structure will preferably partition in the droplet phases. Using chiral salts with different structure, we can rationally produce cholesteric phase in the droplets that gives rise to a twisted onion-like liquid crystal droplet configuration. The fundamental significance and the accomplished application development based on this discovery will also be discussed.