Molecules dissolve in other molecules that have similar characteristics.(In particular, the ability or inability to distribute electronic chargeis an important characteristic for solubility.) Water is a polarmolecule -- that is, electronic charges are localized on specific atoms.Oil is a non-polar molecule -- electronic charges are de-localized overall atoms. Water dissolves other polar molecules and oil dissolves othernon-polar molecules but water does not dissolve oil (and vice-versa).
