In the present work, squalene (SQ) was encapsulated by a conventional emulsion method using egg white protein nanoparticles (EWPn) as a high molecular weight surfactant, followed by a freeze-drying process to obtain an SQ powder ingredient. EWPn was produced by heat treatment at 85 • C, 10 min, and pH 10.5. EWPn showed higher emulsifying activity regarding native egg white protein (EWP), highlighting their potential to be used for the SQ encapsulation by an emulsification process. First, we explored the encapsulation conditions using pure corn oil as an SQ carrier. Conditions were oil fraction (0.1-0.2), protein amount (2-5 wt.%), homogenization pressure (100 and 200 bar), and maltodextrin amount (10-20 wt.%). At 0.15 oil fraction, 5 wt.%. protein concentration, 200 bar homogenization pressure, and 20% maltodextrin, the highest encapsulation efficiency (EE) was reached. Then, according to these conditions, SQ was encapsulated to obtain a freeze-dried powder ingredient for bread formulation. The total and free oil of SQ freeze-dried powder were 24.4% ± 0.6% and 2.6% ± 0.1%, respectively, resulting in an EE value of 89.5% ± 0.5%. The physical, textural, and sensory properties of functional bread were not affected by the addition of 5.0% SQ freeze-dried powder. Finally, the bread loaves showed higher SQ stability than the one formulated with unencapsulated SQ. Hence, the encapsulation system developed was suitable for obtaining functional bread based on SQ fortification.