Heating of polystyrene beads containing pentane isomers as the blowing agent traditionally produces polystyrene foam. Undesirable emissions of the blowing agent and its high flammability are the complications of this process. A new process for the production of expandable polystyrene has been developed, using water as the blowing agent. Water is trapped inside the polystyrene matrix through the use of starch that is introduced as a separate phase during the suspension polymerization. The problems created by the incompatibility of starch with the organic phase can be partially overcome by “compatibilization” with maleic anhydride. The type of starch can influence the foam morphology of the pre-expanded beads, while the density is changed only in the range of the experimental error. The density of the pre-expanded beads is influenced by the blowing technique used (hot air or high frequency electric field). The use of these different blowing techniques does not influence significantly the foam morphology.