The influence of bearing elasticity and micropolar parameters of micropolar lubricant on the performance and stability margin of a smooth hole-entry hybrid journal bearing system compensated with capillary restrictor has been presented in this paper. Isothermal conditions are assumed for the operation of journal bearing system. Finite element method is used to obtain the coupled solution of modified Reynold's equation and three dimensional elasticity equations. Performance characteristics are calculated in terms of minimum fluid film thickness, maximum fluid film pressure, attitude angle, critical journal mass, threshold speed and frequency of whirl for various values of design parameters like external load, restrictor design parameter, coefficient of deformation and micropolar parameters of the micropolar lubricant. The results presented in this study may be quite useful in the selection of the appropriate combination of the restrictor design parameter and elasticity of bearing so as to ensure the design of a stable bearing operating with micropolar lubricant. There exist an optimum value of restrictor design parameter (C S2) where the performance characteristics and stability margin are maximum for rigid as well as flexible bearing operating with Newtonian and micropolar lubricants.