The physics and chemistry of ore formation in magmatic sulphide systems are dominantly controlled by the dynamics and kinetics of transported sulphide liquid droplets. We examine the relative importance of chemical dissolution (owing to changes in sulphide concentration at sulphide saturation in the magma) on droplet size, and conclude that the timescales for dissolution (of the order of several days to thousands of years) are much longer than the timescales for dynamic processes (of the order of seconds). We examine dynamic processes that lead to droplet break-up, and delineate the different domains of behaviour that arez encountered over a range of magma flow regimes from stagnant to turbulent, and according to droplet size. Droplets can break up via a variety of mechanisms including deformation and rupture in turbulent flows, and ligament stretching and relaxation in chaotic laminar flows. Droplets larger than a few millimetres in diameter are likely to break up owing purely to the viscous forces acting on them as they settle through stagnant environments. We conclude that droplet break-up, rather than coalescence, is the dominant mechanism for modifying droplet size populations during flow, and that break-up is particularly likely to be prevalent in turbulent komatiite magma and chaotic flow in basaltic magma. The size distributions observed in sulphide blebs and droplets in nature are interpreted as the result of multiple superimposed processes that are active on different portions of the droplet size distribution: growth of sulphide droplets from sulphide-saturated silicate magma and mechanical accumulations of transported assimilated droplets that have undergone break-up during transport. By determining which droplets are stable and which will undergo break-up we show that the presence of large (>2 mm) sulphide droplets or blebs in cumulate rocks is an indicator of proximity to a sulphide source or reworked sulphide liquid pool.