Nanocapsules loaded with bioactive compounds derived from medicinal plants have numerous possibilities in the development of biochemical delivery systems. Elaeagnus angustifolia L., commonly known as Russian olive, is used in traditional medicinal in the Middle East as an analgesic for arthritis and joint pain. Because E. angustifolia contains vitamin A, vitamin B, abundant calcium, and vitamin K, an effective coagulant, it has been considered as potentially beneficial in wound healing and scar formation, as well as in the treatment or prevention of osteoporosis. Nanocapsules containing an E. angustifolia‐filled core can be fabricated employing polymerization. In this process, nanocapsules are prepared using poly ethylene glycol–poly butylene adipate–poly ethylene glycol (PEG‐PBA‐PEG) as a shell surrounding a core of E. angustifolia and olive oil. In this study, the relative proportions of polymer and oil, concentrations of polymer and bioactive compound, and presence or absence of various surfactants in different concentrations were investigated in relation to the particle size of the final product. A comparison of samples obtained using the surfactants Tween 80, Tween 60, poly vinyl alcohol (PVA), mixed Tween 80 and PVA, and mixed Tween 80 and Tween 60 showed Tween 80 to result in the smallest particle size. An oil‐to‐polymer ratio of 1:0.25 resulted in the smallest nanoparticle size. Smaller nanoparticles sizes were obtained using lower concentrations of polymer and higher concentrations of the bioactive compound. Fourier transform infrared spectroscopy, proton nuclear magnetic resonance, particle size analysis, and scanning electron microscopy were used to identify and characterize the nanocapsules. Copyright © 2013 John Wiley & Sons, Ltd.