Vegetable oil-in-water (VO/W) emulsions are bio-based metal working lubricants. The emulsions’ lubrication performance depends on the stability of oil droplets. In this paper, the oil droplets’ dispersion stability and lubrication of emulsions containing TiO2/SiO2 nanoparticles (NPs) as dispersant and lubrication agents have been investigated. Enhanced dispersion of NP-shielded oil droplets was found. Increasing the NPs’ mass fraction initially lowers the average size of NP-shielded droplets up to the saturation of the droplets’ surface with NPs at 0.5 wt % mass fraction. NPs also form NP agglomerates in emulsions, more so after the droplets’ surfaces have been saturated with NPs. There is an apparent minimum quantity of NPs (~0.5 wt %) required to ensure sustained dispersions of the droplets which is thought to be related to the oil concentration and the droplets’ total surface-area-to-volume ratio. Below the required quantity of NPs, partially shielded and fully shielded droplets coexist. The partially shielded droplets initially attract other droplets and undergo limited coalescence but retain their long-term stability. A small quantity of NPs improves the antiwear property of the lubricants. However, emulsions with NPs have slightly higher friction than the NP-free emulsion due to the reduced strength of the tribofilm. Despite the increased friction, the tribofilm formed in presence of NPs can easily be removed from the surface with water, indicating cleaner surfaces after the lubrication (i.e., less oil residue on the surfaces), which, for the sake of cleanliness, is favourable in many applications.