Precise control over the interfacial area of aqueous and organic slugs in segmented flow in a microchannel reactor provides an attractive means to optimize the yield and productivity of a phase-transfer-catalyzed reaction. Herein, we report the selective alkylation of phenylacetonitrile to the monoalkylated product in a microchannel of 250-µm internal diameter operated in a continuous and solvent-free manner in the slug-flow regime. The conversion of phenylacetonitrile increased from 40% to 99% as a result of a 97% larger slug surface-to-volume ratio when the volumetric aqueous-to-organic phase flow ratio was raised from 1.0 to 6.1 at the same residence time. The larger surface-to-volume ratio significantly promoted catalyst phase transfer but decreased selectivity because of the simultaneous increase of the rate of the consecutive reaction to the dialkylated product. There exists an optimum flow ratio with a maximum productivity. Conversion and selectivity in the microchannel reactor were both found to be significantly larger than in a stirred reactor.