A process for preparing emulsions of alkyl ketene dimer (AKD) nanoparticles via a nanoemulsion template (emulsion/evaporation) method has been developed. The effects of types and contents of stabilizing agents, i.e. , anionic (sodium dodecyl sulfate, SDS), cationic (cetyltrimethylammonium bromide, CTAB), amphoteric (phosphatidylcholine, PC), and polymeric (poly(vinyl alcohol), PVA), on the colloidal stability and hydrodynamic size of the AKD nanoparticles are investigated. The use of 0.1 wt % anionic SDS as a stabilizer generates nanoparticles with high stability and the smallest average size of 148 ± 5 nm. The environmentally friendly water-based emulsion prepared without halogenated compounds and harsh organic solvents is then applied to enhance the hydrophobicity of teakwood products by a simple dipping process. The properties and structures of the resulting treated woods are examined by attenuated total reflectance Fourier transform infrared (ATR-FTIR) spectroscopy, scanning electron microscopy (SEM), and water contact angle (WCA) measurements. The treated woods show superhydrophobicity with a WCA value of 150 ± 2°, as the emulsion generates a hydrophobic layer covering the wood surfaces due to the β-ketoester bond formation and the arrangement of AKD hydrophobic tails. The nanosized nanoparticles can penetrate the dense structure of the teakwood and form similar bonding for up to a 0.8 mm depth, generating a protective water-repellent layer in the wood structure. The emulsion has high potential for use in the commercial production of value-added teakwood products, with excellent water-resistant properties and high dimensional instability, without altering their physical appearances.