Emulsion electrospinning was recently introduced to minimize the amount of organic solvent during electrospinning process. Here, we uncover the theoretical and experimental basis for the fiber formation in emulsion electrospinning by revealing the viscoelastic interaction between dispersed and continuous phase. Composite electrospun matrices of poly(epsilon-caprolactone) (PCL) with or without hydroxyapatite were devised from an oil-in-water emulsion. The fiber formation and uniformity were clearly governed by the viscoelastic interaction between the continuous and dispersed phase. Caging of droplets by optimal quantity of poly(vinyl alcohol) (PVA) in continuous phase resulted in uniform stretching and coalescence of droplets. An increased storage and loss modulus for emulsions containing optimum PVA manifested desired viscoelastic interaction between dispersed and continuous phase, which further resulted in uniform jet stretching. The visthelasticity of the emulsion could be tailored by changing the polymer concentration in dispersed or continuous phase, which enabled production of electrospun fibers with desired fineness.