Microencapsulation is an emerging technology that involves the formation of microcapsules by entrapping active agents inside coating or wall material; all these ingredients must be biodegradable.Different technologies are being adopted for better microencapsulation of food ingredients and novel drug delivery.Selection of microencapsulation technology, coating/wall material & core material in relevance with each other can play a significant role in getting potentially promising results.The main reason for using microencapsulation technology is to protect sensitive components of food, prevent nutritional losses, ensure the utilization of sensitive ingredients, mask the unpleasant smell, and convert liquid into solid ingredients that can be handled easily.Drugs are released at their targeted sites in the gastrointestinal tract due to different mechanisms like Diffusion, osmosis, dissolution & erosion.This review paper aims to provide reasons, applications of microencapsulation, core & coating material, some effective technologies used for microencapsulation, and recent literature on these aspects.