The purpose of this research was to characterize and optimize the properties of microcapsules produced by the solvent exchange method, a new microencapsulation technique. Reservoir-type microcapsules containing lysozyme as a model protein were produced using a coaxial ultrasonic atomizer under various formulation and instrument settings, and characterized with respect to in vitro release kinetics and stability of the encapsulated protein. The solvent exchange method could encapsulate protein drugs with high efficiency under an optimized condition and was mild enough to preserve the integrity of the encapsulated lysozyme during the process. In vitro release studies showed that the microcapsules could release proteins in a controllable manner. The solvent exchange method is a mild and simple microencapsulation method that could encapsulate lysozyme, maintaining its functional integrity.