<p>Encapsulation is an important technology used in modern food systems that allows for the protection, stabilization, and controlled release of sensitive functional ingredients within complex food matrices. This review discusses recent encapsulation technologies and their roles in enhancing food functionality, extending shelf life, improving bioavailability, and promoting sustainability. Although several reviews have focused on encapsulation materials, encapsulation techniques, or applications individually, there is still no review that integrates all three aspects comprehensively. Micro and nano encapsulation technologies, such as biopolymeric carriers, liposomes, and stimuli responsive encapsulation technology, are studied with regards to their mode of action and the processing involved. Controlled-release properties that protect oxidation- and heat-sensitive nutrients, as well as the incorporation of encapsulated ingredients into dairy, beverage, and plant-based protein products, are reviewed. Recent case studies reveal that advanced encapsulation technologies improve probiotic viability, enhance vitamin retention, stabilize volatile flavors, and facilitate the development of clean-label products. Additionally, manufacturing challenges, scale-up limitations, regulatory considerations, and sustainability impacts are discussed to provide a holistic perspective on industrial implementation. Through the combination of materials, encapsulation techniques, and food system applications into a cohesive discussion, this review illustrates encapsulation as a key enabler in the advancement of food quality, sustainability and innovation.</p> Graphical Abstract <p></p>