In SAGD (Steam Assisted Gravity Drainage) operations the produced fluids are complex water-in-oil-in-water (W/O/W) emulsions. A diluent is often added to reduce the density and viscosity of the heavy crude oil. However, the quality and composition of the diluents may in some cases increase emulsion stability and cause the dehydration of the oil to be more difficult as there are more surface-active agents added to the oil coming from the diluent streams. To simulate temperature and pressure conditions during SAGD operations, this work studied the effect of three diluents on interfacial rheology of a Canadian heavy oil and synthetic brine at 120°C and 130 psi and then correlated with emulsion stability and oil dehydration. When compared to 25°C, all three diluents exhibited higher higher compressibility at 120°C, while the initial interfacial tension, "phase change" area ratio (area ratio at which the phase change from high compressibility region to low compressibility region), and crumpling ratio (ratio of the compressed surface area to the original area at which the interface starts to collapse) exhibited a more complex behavior. The higher interfacial tension and higher compressibility were correlated with the lower emulsion stability at increasing pressure and temperature in the absence of treating chemicals. Increasing ageing of the film from 10 minutes to 1 hour at 120°C had a similar effect on the three diluents, suggesting the formation of a more elastic film as asphaltenes start to cross-link on the interface. The effect of demulsifiers (emulsion breakers-EB and reverse emulsion breakers-REB) on interfacial was also investigated at RT and 90°C. Demulsifiers that produced the minimum interfacial tension (IFT) with changing concentrations demonstrated to be the best demulsifiers in the bottle tests. A synergistic effect in reducing IFT was found when EB and REB when combined.