The present study has numerically explored the mechanism of interface evolution and internal flow circulations during the droplet formation in two-phase flow through a planar T-microchannel. The two-dimensional unsteady form of the conservative level set equation coupled with Navier–Stokes equations has been solved using the finite element method. The range of parameters include the contact angle (θ) from 120° to 180°, and the flow rate ratio (Qr) from 0.1 to 10 for the low capillary number (Cac≤10−2). The present study indicates that surface wettability plays a crucial role in influencing the temporal evolution of the interface. The internal flow circulation in the droplet is controlled by the axial and radial velocities primarily influenced by shear stress. The newly introduced novel “interface-to-neck ratio” parameter has provided another platform to investigate the pinch-off dynamics of droplets. Moreover, the phenomenon of droplet pinch-off is primarily initiated and driven by the Laplace pressure, defined by three distinct approaches: the pressure difference method, the determination of the minimum local radius of curvature on the rear side, and a calculation of the neck width. The predictive correlations have been established to estimate the droplet characteristics as a function of the flow rate ratio and contact angle. The findings reported have significant implications for the design of droplet dispensing systems that depend on surface wettability as a critical regulating parameter.