Why does my lime peel-alcohol infusion become cloudy when mixed with water? Over the past week or so, I've been experimenting with infusing lime peels in alcohol, by:


Peel limes
Mix with 250mL of 151-proof grain alcohol
Let sit for a week
Strain through a coffee filter.


What I got is a nice, clear-green liquid:



However, I've discovered that when you dilute this with water, it becomes cloudy:



(click to see bigger, longer version)

Why does mixing two clear liquids create a cloudy liquid?
This is a kind of emulsion called the Ouzo Effect (ouzo and other aniseed drinks also do this). I won't pretend to know enough to explain it, but it's essentially down to how oils (like those in fruit skin), water, and alcohol interact when stirred or otherwise agitated.

Wikipedia has an article that explains it fully.