When vaporization occurs in the presence of a temperature gradient in the boundary layer, homogeneous nucleation and condensation of droplets may occur. This process is studied theoretically in a rotating disk flow system for iron vaporizing into an atmosphere of cold argon. The usual boundary‐layer conservation equations are provided with appropriate source or sink terms to account for the conversion of the gaseous diffusing species (monomer) to drops of liquid and vice versa. Conservation equations for the monomer and for drops of all sizes are required. The source and sink terms are developed from the classical theory of homogeneous nucleation. Simultaneous solution of the coupled monomer and droplet equations provides insight into the enhancement of the vaporization rate due to condensation and also into the structure of the nucleation, droplet growth, and re‐evaporation cycle which was found to take place in the boundary layer on the disk.