The global increase of road infrastructure and its impact on the environment requires serious attention to develop sustainable and environmentally friendly road materials. One group of those materials is produced by using bitumen emulsion. However, there are still scientific and technical obstacles standing against its regular application. The bitumen emulsion formulation process and compositional optimization are subjected to a high number of degrees of freedom. Consequently, obtaining the desired product is mostly based on a series of random and tedious trials because of the enormous number of tests to be carried out. The current review of the physicochemical formulation may indeed be extensively used in helping to reduce the number of unnecessary experimentations as well as discuss the vital aspects in the bitumen emulsion production process. Among these, emulsion stability, viscosity, droplet size (and distribution), bitumen emulsion chemistry, the function of the emulsion components, surfactant type, acids or alkalis, and additives are all discussed and used to define the emulsion's physical properties and reactivity. Besides, current developments in the mechanisms of breaking and setting processes are also summarized. It is discussed how emulsions are graded based on their reactivity, particle charge, and physical features. Two emulsification techniques are outlined namely the colloid mill method and the High Internal Phase Ratio (HIPR) method. Furthermore, some emulsion formulation tools/theories were identified and are explained. In that way, optimized formulations can be used to offer a practical guide for bitumen emulsion manufacturers when trying to formulate a well-defined bitumen emulsion for its use in pavement infrastructure rather than simply to meet standard specifications. This review paper aims to enable the ultimate potential of the bitumen emulsion in the field of cold recycling technology by further following up the research progress of bitumen emulsion manufacturing, therefore, this paper reviews and discusses the literature available up to now on this topic, in road engineering and emulsion chemistry.