Polyelectrolyte (PE)-encapsulated catalase microcrystals were assembled onto gold electrodes by their sequential deposition with oppositely charged PEs, utilizing electrostatic interactions to form enzyme thin films for biosensing. The PE coating around the microcrystals provided a regular surface charge, thus facilitating the stepwise film growth, and it effectively prevented catalase leakage from the assembled films. The encapsulated catalase was shown to retain both its biological and its electrochemical activity. Direct electron transfer between catalase molecules and the gold electrode was achieved without the aid of any electron mediator. In pH 5.0 phosphate buffer solution, the apparent formal potential (E(o)') of catalase was -0.131 V (vs Ag/AgCl). As a H2O2 biosensor, films consisting of one layer of the encapsulated catalase displayed considerably higher (approximately 5-fold) and more stable electrocatalytic responses to the reduction of H2O2 than did corresponding films made of one layer of nonencapsulated catalase or solubilized catalase. An increase in either the number of "precursor" PE layers between the gold electrodes and the catalase microcrystal layers in the film or the number of PE layers encapsulating the catalase microcrystals was found to decrease the electrocatalytic activity of the electrode. At low precursor PE layer numbers (approximately 2) and PE encapsulating layers (approximately 4), the current response was proportional to the H2O2 concentration in the range 3.0 x 10(-6) to 1.0 x 10(-2) M. The overall electroactivity of the multilayer film increased for the first two layers of encapsulated catalase, after which a plateau was observed. This was attributed to the increasing difficulty of electron transfer and substrate diffusion limitations. The current approach of using immobilized PE-encapsulated enzyme microcrystals for biosensing provides a versatile method to prepare high enzyme content films with high and tailored enzyme activities.