HYPOTHESIS: Multiphase liquids with a droplet-in-matrix morphology are ubiquitous in many industries, from food to cosmetics and pharmaceuticals to plastics. The challenge is to control the average droplet size, which is a key parameter for the performance of the material. Nanoparticles at the droplet-matrix interface make it possible to stabilize polymer blends against coalescence. However, it has been shown that very low amounts of nanoparticles can have the opposite effect and surprisingly promote coalescence. Regardless of whether this phenomenon is desirable or not, it is important to understand it and potentially utilize it for rational design of multiphase fluids. EXPERIMENTS: We use microfluidics to unveil the mechanism of nanoparticle-induced coalescence in a model blend of polydimethylsiloxane in poly(iso)butylene (PDMS/PB 4/96 vol/vol) containing tiny amounts (up to about 0.2 wt%) of zinc oxide (ZnO) nanoparticles driven at the droplet-matrix interface via a two-step mixing protocol. RESULTS: Despite negligible effects on rheology and interfacial energy, the nanoparticles significantly promote coalescence. Analysis of hundreds of coalescence events revealed that the nanoparticles bridge colliding droplets and keep them in contact long enough to allow drainage of the matrix film even when the collisions occur at unfavorable angles where bare droplets do not coalesce. This novel "bridge-to-drain" mechanism requires that (i) the droplets are only partially covered by the particles and (ii) the latter have the ability to bridge droplets. A dimensionless critical surface coverage fraction was defined, above which the nanoparticles stop promoting coalescence and start stabilizing the microstructure.