Biomolecule encapsulation in droplets is important for miniaturizing biological assays to reduce reagent consumption, cost and time of analysis, and can be most effectively achieved by using microfabricated devices. Microfabricated fluidic devices can generate emulsified drops of uniform size with controlled dimensions and contents. Biological and chemical components such as cells, microgels, beads, hydrogel precursors, polymer initiators, and other droplets can be encapsulated within these drops. Encapsulated emulsions are appealing for a variety of applications since drops can be used as tiny reaction vessels to perform high-throughput reactions at fast rates, consuming minimal sample and solvent amounts due to the small size (micron diameters) of the emulsion drops. Facile mixing and droplet coalescence allow for a diversity of assays to be performed on-chip with tunable parameters. The simplicity of operation and speed of analysis with microencapsulated drops lends itself well to an array of quantitative biomolecular studies such as directed evolution, single-molecule DNA amplification, single-cell encapsulation, high-throughput sequencing, enzyme kinetics, and microfluidic cell culture. This review highlights recent advances in the field of microfabricated encapsulating devices, emphasizing the development of emulsifying encapsulations, device design, and current assays that are performed using encapsulating droplets.