A technique is described for breaking the very strong emulsion of shale oil and water produced by an in situ oil shale retorting process so that separate shale oil and water phases can be recovered. The emulsion is broken by heating it to a temperature of at least about 120.degree. F. and holding at a temperature in the range of from about 120.degree. to 180.degree. F. for about one day. Preferably the shale oil and water are held in the range of from about 130.degree. to 150.degree. F. for about one day and the phases separated by gravity. Heat for the process can be obtained by injecting water into a spent in situ oil shale retort for generating steam and transferring heat from the steam to the emulsion.