We present new observations of aqueous two-phase system (ATPS) thermodynamic and interfacial phenomena that occur inside sessile droplets due to water evaporation. Sessile droplets that contain polymeric solutions, which are initially in equilibrium in a single phase, are observed at their three-phase liquid−solid−air contact line. As evaporation of a sessile droplet proceeds, we find that submicron secondary water-in-water (W/W) droplets emerge spontaneously at the edges of the mother sessile droplet due to the resulting phase separation from water evaporation. To understand this phenomenon, we first study the secondary W/W droplet formation process on different substrate materials, namely, glass, polycarbonate (PC), thermoplastic elastomer (TPE), poly(dimethylsiloxane)-coated glass slide (PDMS substrate), and Teflon-coated glass slide (Teflon substrate), and show that secondary W/W droplet formation arises only in lower-contactangle substrates near the three-phase contact line. Next, we characterize the size of the emergent secondary W/W droplets as a function of time. We observe that W/W drops are formed, coalesced, aligned, and trapped along the contact line of the mother droplet. We demonstrate that this W/W multiple emulsion system can be used to encapsulate magnetic particles and blood cells, and achieve size-based separation. Finally, we show the applicability of this system for protein sensing. This is the first experimental observation of evaporation-induced secondary W/W droplet generation in a sessile droplet. We anticipate that the phenomena described here may be applicable to some biological assay applications, for example, biomarker detection, protein sensing, and point-of-care diagnostic testing.