A co-axial electrospray process was developed to encapsulate protein-based drugs in biodegradable polymeric microparticles eliminating the key problem faced by other conventional methods of protein encapsulation--the primary emulsion being a major cause for protein denaturation and aggregation. Bovine serum albumin (BSA) and lysozyme were chosen as model protein drugs for this study. Scanning electron microscopy observation of the morphology of particles showed spherical microparticles of several microns could be achieved. In vitro release profiles measured using Micro-BCA assay indicated sustained release of proteins for more than 30 days. The results of circular dichroism suggested that the secondary structure of released BSA can be retained. The bioactivity of released lysozyme was found to be more than 90% which is higher than the values reported from most literatures. Therefore, co-axial electrospray could be a very promising approach to encapsulate biomacromolecules such as proteins, enzymes, DNA plasmids or living cells inside microparticles for controlled release drug delivery applications.