A simple and environmentally benign one-pot three-component tandem synthesis of a series of novel 4-thiazolidinones has been accomplished ''on water'' by reacting aliphatic or aromatic primary amines with thioglycolic acid and a wide range of aromatic aldehydes at ambient temperature using p-dodecylbenzenesulfonic acid (DBSA) as a Brønsted acid-surfactant combined catalyst. The unique ability of the catalyst has been utilised to form emulsion droplets with organic substrates in aqueous medium whose interior core is hydrophobic enough to exclude the water molecules generated during the rate limiting dehydration step of the reaction. This protocol worked well with a variety of substrates and the desired products were obtained in fairly good yields.