On-demand droplet generation from a continuously flowing stream of aqueous phase has profound applications in droplet-based microfluidics for rare event encapsulation studies. Here, we present acoustic relocation based droplet generation from co-flowing immiscible fluids in an on-demand manner using bulk acoustic wave (BAW). After on-demand droplet generation, droplets are isolated using the same acoustic force resulted from BAW. Two different acoustic relocation regimes are observed, namely, stream to droplet relocation and stream to stream relocation regime. Our experimental observation reveals that to generate droplets from co-flowing fluids, the following conditions have to be satisfied. First, the co-flowing immiscible stream should be maintained in acoustic relocation conditions; Second, the capillary instability should be triggered during the relocation process, which happens at capillary numbers of the co-flowing fluids should be less than 0.2. Finally, using BAW microfluidic chip, droplets containing microparticle were produced on-demand from co-flowing streams wherein the microparticles are added in one of the phases.