This research uses modified orifice method to prepare the O/W type Chitosan encapsulated volatile Citronella Oil microcapsules. In this article, we investigated the forming condition of microcapsules and the influence to sustained release effect of volatile Citronella Oil by applying thermal pretreatment to microcapsules. The results suggest that the forming of microcapsules should be processed under the fundamental conditions of: (1) the concentration of Chitosan is at least 0.2wt%, (2) NaOH is greater than 0.1wt%, and (3) with the additive of coconut oil as natural surfactant, so that we could obtain final product of microcapsules with better formation and dispersion. The changes in concentration of Chitosan will affect the encapsulation efficiency of the volatile Citronella Oil. When the concentrations of Chitosan are 0.5%, 1.0% and 1.5%, the encapsulation efficiencies are 98.2%, 95.8% and 94.7%, respectively. The particle size of Chitosan microcapsules would decrease as the emulsification stirring speed increases. When the stirring speeds are 400 rpm, 800 rpm, and 1500 rpm, the average particle sizes of microcapsules produced are 225+/-24 microm, 131+/-20 microm, and 11+/-3 microm, respectively. If the microcapsules were thermal pretreated at 80 degrees C, the structure of Chitosan wall membrane would shrink and thus achieve the effect of sustained release. The sustaining effect would increase along with treatment time increases.