The dynamics of a surfactant stabilized water droplet suspended in oil under the action of a non-uniform AC electric field was experimentally investigated. The experimental cell consists of two 25 mm × 15 mm glass plates separated by a 150 μm gap. An array of transparent ITO electrodes was fabricated on the surface of the bottom glass plate to provide a non-uniform electric field. The frequency of applied bipolar sine voltage was varied within the range 1 Hz – 1 kHz and the voltages up to 300 V were applied. An optical microscope and a high speed imaging system were used to get video sequences. The action of a non-uniform AC electric field results in oscillatory droplet dynamics, which consists of periodic droplet deformation and translation between the electrodes. Parameters of droplet oscillations within the specified voltage and frequency ranges were studied. It was found that electrophoresis and dielectrophoresis competitively force the droplet oscillations, but their contribution depends on the electric field frequency. A mathematical model describing the experimental results is proposed. This study is supported by Grant of Ministry of Education and Science of the Russian Federation (11.G34.31.0040).