An encapsulation treatment of lead-free Sn/Zn/Bi solder powder was investigated for improving the oxidation resistance. Sn-8mass%Zn-3mass%Bi alloy particles were coated with a wax (12-hydroxystearic acid) powder by means of a dry mechanical treatment method using a ball mill. In order to determine the optimum operating conditions of the ball mill in the wax-coating treatments, the compressive energy required for deforming a single Sn/Zn/Bi alloy particle was measured with an unconfined compression tester and the mechanical energy applied to the alloy particles in the ball mill was estimated using the results of the compression test. The optimum operating conditions were determined based on both the applied energy and the flowability of solder pastes, and the wax-coated alloy particles maintaining the spherical shape were obtained under the conditions. The wettability test and the solder balling test for the solder pastes containing the wax-coated alloy particles stored at room temperature in air were carried out to evaluate the oxidation resistance performance. The wax-coated alloy particles had an excellent wettability compared with the original alloy particles, and the oxidation resistance of the Sn/Zn/Bi solder powder was improved by the encapsulation treatment.