Abstract Recent developments in micro and nanoencapsulation are promising tools to encounter the different limitations of essential oil formulations, enhance their functionalities, and protect them from the external environmental conditions. This review addresses the current studies and progresses related to the development of encapsulated essential oils using different systems and carrier material types. It also focuses on the formation methods used with the subsequent physicochemical characterization of the developed particles. Moreover, this review considers the factors affecting the release of essential oils with the different physicochemical release models. The choice of the appropriate formation method as well as the carrier material types and system forms were shown to highly depend on the intended purpose of the encapsulated essential oil formulation. Micro and nanoencapsulation are used to control essential oils’ release properties, enhance the various characteristics of essential oils, and allow to expand applications in different fields. This review provides the optimal conditions for micro and nanoencapsulation of essential oil formulations based on the intended end uses.