Propolis is a well-known natural antibacterial substance with various biological activities, such as anti-inflammatory and antioxidant activity. However, applications of propolis are limited due to its low water solubility. In this study, propolis microcapsules were developed with a core material of ethanol extract of propolis and shell materials of gum arabic and β-cyclodextrin using a spray-drying technique. The optional processing formula, particle size distribution, morphology, dissolution property, and antibacterial activity of propolis microcapsules were determined. The results showed that the optional processing obtained an embedding rate of 90.99% propolis microcapsules with an average particle size of 445.66 ± 16.96 nm. The infrared spectrogram and thermogravimetric analyses showed that propolis was embedded in the shell materials. The propolis microcapsules were continuously released in water and fully released on the eighth day, and compared to propolis, the microcapsules exhibited weaker antibacterial activity. The minimum inhibitory concentrations (MICs) of propolis microcapsules against Escherichia coli and Staphylococcus aureus were 0.15 and 1.25 mg/mL, and their minimum bactericidal concentrations (MBCs) were 0.3 and 1.25 mg/mL, respectively. This water-soluble propolis microcapsule shows the potential for use as a sustained-release food additive, preservative, or drug.