This study was designed to develop an optimized co-solvent evaporation procedure for the efficient encapsulation of hydrophobic drugs in polymeric micelles of methoxy poly(ethylene oxide)-block-poly(epsilon-caprolactone) (MePEO-b-PCL). MePEO-b-PCL block copolymers having varied MePEO and PCL molecular weights were synthesized, assembled to polymeric micelles, and used for the encapsulation of cyclosporine A (CyA) by a co-solvent evaporation method. The co-solvent composition was varied by changing the type of organic co-solvent (using acetone, acetonitrile and tetrahydrofuran), the ratio of organic to aqueous phase, and their order of addition. Carrier size, morphology and encapsulated CyA levels were defined by dynamic light scattering (DLS), transmission electron microscopy (TEM) and HPLC, respectively, and the effect of co-solvent composition on micellar properties and loaded CyA levels was evaluated. Application of acetone and acetonitrile as the selective co-solvent for the core-forming block led to a decrease in the average diameter of self-assembled structures. When acetone was added to water, a decrease in the ratio of organic to aqueous phase led to an increase in the loading efficiency of CyA in MePEO-b-PCL micelles. A similar trend in CyA loading was observed for MePEO-b-PCL micelles of varied MePEO and PCL block lengths. The ratio of organic to aqueous phase did not affect CyA loading when water was added to acetone. Irrespective of the order of addition, the decrease in the organic to aqueous phase ratio caused a reduction in the average diameter of the empty and CyA loaded micelles. We conclude that the co-solvent evaporation method may be optimized to improve the efficiency of drug encapsulation in polymeric micelles. For CyA encapsulation in MePEO-b-PCL micelles, addition of acetone to water at lower organic to aqueous phase ratio is shown to be the optimum procedure leading to higher drug encapsulation and smaller average diameter for the self-assembled structures.