A homogeneous micellar free radical polymerization process for the formation of a terpolymer having the structure of: ##STR1## wherein S is selected from the group consisting of SO.sub.3 M, phenyl SO.sub.3 M, CONHC(CH.sub.3).sub.2 CH.sub.2 SO.sub.3 M or COOM; M is selected from the group consisting of Groups IA, 1B, IIA and IIB of the Periodic Table of Elements, R.sub.1 is a C.sub.1 to C.sub.10 alkyl, cycloalkyl or aralkyl group, R.sub.2 is hydrogen or a C.sub.4 to C.sub.18 alkyl, cycloalkyl or aralkyl group, x is about 10 to about 90 mole %, y is about 0.1 to about 60 mole %, and z is about 0.2 to about 10 mole % which comprises the steps of forming a mixture of an anionic surfactant, a nonionic surfactant, ##STR2## under a nitrogen atmosphere; adding deoxygenated water to said mixture to form a homogeneous reaction solution; adding free radical initiator to said homogeneous reaction solution to initiate polymerization of said monomers; terpolymerizing said monomers at a sufficient temperature and for a sufficient period of time to form said terpolymer and without the formation of substantial amounts of particulates or phase separation occurring.