A new method of preparing gelatin microcapsules of soluble pharmaceuticals is described. Spherical droplets of a gelatin dispersion prepared in the drug solution were produced by the capillary method, and the droplets were congealed rapidly to yield discrete units in the form of a free-flowing powder. The microcapsules obtained were spherical in shape and showed no tendency to form agglomerates. Hardening of the microcapsules resulted in a significant reduction of the release rate without altering the reproducibility. The results indicated that the process of microencapsulation described is simple, reproducible, economical, and amenable to industrial application.