Microencapsulation is latest development in the pharmaceutical field for controlled and sustained drug delivery systems. It has several applications in different areas such as the pharmaceutical, agricultural, medical, biotechnological, engineering and food industries. Its scope extends beyond conventional microcapsules to all other small particulate systems such as microspheres, self-assembling microspheres, and microcapsules. It plays crucial part in the drug delivery system due to the awareness of the difficulties associated with a variety of old and new drugs.This review article highlight the various drug formulated by microencapsulation, the sustained and controlled drug delivery system, different types of polymers and properties of the drugs that are suitable to be encapsulated into microcapsules. The microencapsulation technique has successfully proven to be one of the finest ways to modify the drug release and the residence time in the gastrointestinal with contact with the mucosa layer, reduce dosing frequency, and improve patient compliance.