A new tyrosine kinase inhibitor (denoted as CH331) and its poly(epsilon-caprolactone) (PCL) microspheres were studied. The CH331 particles were pretreated with ethanol and then used to prepare CH331 loaded PCL microspheres by S/O/W solvent evaporation technique. Solubility values of CH331 in several organic and aqueous media were measured. The amount of ethanol and CH331 solubility play a significant role in drug loading, encapsulation efficiency, mean diameter and morphology of the microspheres, crystallinity and in vitro drug release. The treatment with a suitable amount of ethanol leads to more uniform sizes, better appearance and higher encapsulation efficiency for the microspheres. Compared with 0.5% PVA phosphate buffer solution (pH 7.4), 0.5% PVA aqueous solution as outer aqueous phase lowers encapsulation efficiency of microspheres, however, improves the drug release behavior.