a process is provided for producing a coating composition containing microcapsules having a hydrophilic core material for use in the manufacture of pressure - sensitive carbonless transfer papers comprising the following steps of preparing a hydrophobic emulsion component by dispersing an emulsifier in a radiation curable hydrophobic liquid , preparing a hydrophilic emulsion component by dispersing a first wall - forming material in a hydrophilic liquid containing at least one chromogenic material being soluble in the hydrophilic liquid , the first wall - forming material being reactive with a second wall - forming material to form a polymeric capsule wall , the polymeric capsule wall being substantially insoluble in the hydrophilic and the hydrophobic liquids and mixing the hydrophobic emulsion component with the hydrophilic emulsion component to form an emulsion containing droplets of the hydrophilic emulsion component dispersed in the hydrophobic emulsion component . the second wall - forming material is then added to the emulsion with agitation , the agitation continuing for a period of time sufficient to allow the first and second wall - forming materials to react to form a dispersion of microcapsules in the hydrophobic emulsion component , the microcapsules having cell walls substantially impermeable to the hydrophobic and the hydrophilic liquids . a process is provided for producing a pressure - sensitive carbonless transfer paper comprising the further steps of applying the coating composition to a substrate and curing the coating composition by subjecting the coating composition on the substrate to radiation for a period of time sufficient to cure the radiation curable hydrophobic liquid , thereby producing a tack - free resinous film on the substrate . a novel coating composition is produced comprising microcapsules having a hydrophilic core material dispersed in a radiation curable hydrophobic liquid . a pressure - sensitive carbonless transfer sheet is produced comprising a substrate having a plurality of surfaces , at least one of the surfaces being coated with a tack - free resinous film comprising a radiation cured resin having dispersed therein microcapsules containing a hydrophilic liquid containing at least one chromogenic material , the chromogenic material being soluble in the hydrophilic liquid .