Drop-drop coalescence is important in electric dehydrators used for oil-water separation in the oil industry. The deformation degree, angle between the electric field and the center line of two drops, effects of intensities and frequencies of the electric field have been studied by analyzing droplet images. However, seldom have people investigated the movement and the relative velocity in the process of drop-drop coalescence. In this paper forces acting on a single droplet and horizontal water droplets in an AC electric field were analyzed, and experiments were carried out to investigate the deformation, movement and coalescence characteristics of droplets with white oil and water. With a micro high-speed camera system and image processing technology, the droplet images were collected and analyzed. The results indicate that the deformation is mainly affected by the electric field intensity, frequency, droplet diameter and the oil viscosity. High field strength and large diameter facilitate deformation of drops in the electric field. The effect of frequency and oil viscosity is not obvious. Higher frequency and higher oil viscosity will lead to smaller oscillation amplitude. The effect of electric field intensity and droplet diameter on oscillation amplitude is not obvious. When the center-to-center distance between droplets is large, the forces acting on droplets in the horizontal direction are mainly dipole-dipole attraction and drag forces. There is also the film-thinning force when droplets get closer. The forces are simplified and derived. Based on force analysis and Newton’s second law, the relative movement is analyzed in different parts, and the relationship of center-to-center distance and time is in accordance with an explinear function at different stages. According to experimental data, the movement of 145 μm double droplets before coalescence can be fitted well with an explinear function at two stages. In addition, the whole movement process is investigated and can be estimated with a fourth order polynomial curve, from which the relative velocity of droplet movement can also be obtained. With an increases in electric field intensity and droplet diameter and a decrease in oil viscosity, the relative velocity increases. Only when the oil-water interfacial tension is obviously high, can it influence the relative movement significantly. The coalescence is mainly dipole coalescence and chain coalescence under influence of the AC electric field.