The phase separation of an aqueous two-phase system (ATPS) consisting of 20 wt. % polyethylene glycol (PEG) and 12 wt. % ammonium sulfate (AMS) was investigated under the condition of acoustic levitation. An annular stratification occurs in the acoustically levitated and severely flattened ATPS drops, where the AMS-rich phase is horizontally encircled by the PEG-rich phase. This is different from the conventional top-bottom layered stratification usually taking place in test tubes or levitated oblate drops. Calculation of the total surface and interface energy of a biphasic drop based on two simplified geometric models of stratification demonstrates that the annular structure is more stable than the top-bottom one if the drop is flattened enough. Two stages of phase separation are revealed through videographic and statistical analyses on the PEG-rich globules that are spontaneously formed inside the ATPS drops. The first stage is characterized by rapid reduction in the population of small PEG-rich globules, which is governed by frequent collision and coalescence and can be speeded up by drop oscillation and acoustic streaming during levitation. The second stage shows a slow reduction in the population of PEG-rich globules, a process controlled by integration of those globules into the already-formed bulk PEG-rich layer.