Microencapsulation is an advanced food processing technology, using which any compound can be encapsulated inside a particular material, making a tiny sphere of diameter ranging from 1 μm to several 100 μm. Microencapsulation is done for protecting the sensitive compounds and, hence, ensuring their safe delivery. The compound or active material which is encapsulated is called the core and the material which is used for encapsulating is called the encapsulant. Encapsulants can be either polymeric or nonpolymeric materials like cellulose, ethylene glycol, and gelatin. There are several techniques used for microencapsulation. Fluidized bed coating, spray cooling, spray drying, extrusion, and coacervation are few to be named. The selection of a particular technique depends upon the properties of the core material, encapsulant, and different properties and morphology of the capsules desired. The characterization and optimization of efficient and successful encapsulation can be done by studying the encapsulation efficiency and various properties of the capsules like morphology, size, hydrophobicity, hygroscopicity, solubility, surface tension, thermal behavior, and mechanical properties. Microencapsulation is a technology that is extensively used in foods, whether as a fortifying tool or as a mode for the development of a functional food. Based on the fundamental understanding of encapsulation and latest research and findings from literature, this review critically analyses and brings together the utilization of this particular technique in foods, different methods used for encapsulation, different properties of the capsules which result from the different techniques adopted for microencapsulation and different release mechanisms used for delivering the compounds.