Microencapsulation as a major technique of enzyme immobilization is reviewed. Fabrication of enzyme‐containing microcapsules is broadly categorized according to whether a semipermeable membrane coating or a porous polymeric network structure is primarily responsible for enclosure of enzymes within the internal microcapsule phase. Microcapsules are mostly spherical with diameters usually in the micro‐ to millimeter range and exhibit core‐shell structures of variable complexity. Liposomes and vesicles formed from amphiphilic (co)‐polymers (polymersomes) are widely used to prepare membrane‐coated microcapsules. Hydrogels, sol–gels and other organic–inorganic hybrid materials, or layer‐by‐layer structures made through controlled assembly of polyelectrolytes are used to prepare microcapsules composed of internal polymeric networks. Method combination where polymeric network microcapsules are coated with a suitable membrane to generate tailored core‐shell structures is also used for enzyme encapsulation. Advances in the material sciences contribute to the development of microcapsules with improved properties such as enhanced morphological stability, reduced enzyme leakage, and designed physicochemical permeability and enzyme biocompatibility. Soluble enzymes, but also enzyme aggregates and other insoluble enzyme preparations, are encapsulated. Multienzyme microcapsules are interesting small‐scale bioreactors for confined and even compartmentalized cascade biotransformation. Techniques of microcapsule preparation are described, and applications of microencapsulated enzymes in biotechnology and biomedicine are discussed.