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ABSTRACT Microencapsulation involves the incorporation of food ingredients, enzymes, cells, or other materials in small capsules. Microcapsules offer food processors a means with which to protect sensitive food components, ensure against nutritional loss, utilize otherwise sensitive ingredients, incorporate unusual or time-release mechanisms into the formulation, mask or preserve flavors and aromas, and transform liquids into easily handled solid ingredients. Various techniques are employed to form microcapsules, including spray drying, spray chilling or spray cooling, extrusion coating, fluidized-bed coating, liposome entrapment, coacervation, inclusion complexation, centrifugal extrusion, and rotational suspension separation. Recent developments in each of these techniques are discussed in this review. Controlled release of food ingredients at the right place and the right time is a key functionality that can be provided by microencapsulation. A timely and targeted release improves the effectiveness of food additives, broadens the application range of food ingredients, and ensures optimal dosage, thereby improving the cost effectiveness for the food manufacturer. Reactive, sensitive, or volatile additives (vitamins, cultures, flavors, etc.) can be turned into stable ingredients through microencapsulation. With carefully fine-tuned controlled-release properties, microencapsulation is no longer just an added-value technique, but the source of totally new ingredients with matchless properties.