Droplet-based microfluidics provides an excellent platform for high-throughput biological assays. Each droplet serves as a reaction vessel with a volume as small as a few picolitres. This is an important technology for a high variety of applications. However this technology is restricted to homogeneous assays as it is very difficult to wash reagents from the reaction vessel. To help overcome this limitation, we introduce a method to effectively dilute the content of a droplet while retaining the high throughput. We use electrocoalescence to merge the parent drop with a much larger drop containing only solvent, thereby increasing the volume of the drop by as much as a factor of 14. Three T-junctions then break the larger drop into eight smaller droplets. This dilution and break-up process can be repeated, thus leading to many drops comparable in size to the original one but with much lower concentration of reagents. The system is fully integrated in a PDMS device. To demonstrate its power, we perform a labelling reaction at the surface of the cells by coencapsulating yeast cells expressing S6 peptide tags with the enzyme SFP synthase and the fluorescent substrate CoA 488. After reaction, the droplets are diluted twice using the system and the intensity of their fluorescence is measured. This noise reduction method enables us to more easily distinguish the fluorescence at the surface of a single cell from the fluorescent background inside the droplet.