The development of functional foods through the addition of bioactive compounds holds many technological challenges. Microencapsulation is a useful tool to improve the delivery of bioactive compounds into foods, particularly probiotics, minerals, vitamins, phytosterols, lutein, fatty acids, lycopene and antioxidants. Several microencapsulation technologies have been developed for use in the food industry and show promise for the production of functional foods. Moreover, these technologies could promote the successful delivery of bioactive ingredients to the gastrointestinal tract. Future research is likely to focus on aspects of delivery and the potential use of co-encapsulation methodologies, where two or more bioactive ingredients can be combined to have a synergistic effect.