The objective of this work was to produce xanthone-containing microcapsules by spray drying xanthone with oil emulsion using inulin as the wall material. Inlet air temperature of 200C resulted in free-flowing powder and encapsulation yield was remained at 65% at core-to-wall ratios of 1:2, 1:4 and 1:6. The solubility of xanthone-containing microcapsules was greatly improved to 120.1 ± 2.9 μg/mL compared to that of free xanthone. Physical stability and xanthone retention of microcapsules decreased with increasing storage relative humidity (RH) from 33 to 75%, as supported by the decreasing of glass transition temperature (Tg). Fourier transform infrared spectroscopy (FTIR) confirmed the encapsulation of xanthone within the inulin matrix. Xanthone showed an obvious burst release in simulated intestinal fluid compared to that of simulated gastric fluid. Xanthone microcapsules are useful for functional food product development. Practical Applications: Xanthone is well-known for its anti-oxidant, anti-carcinogenic and anti-inflammatory properties. However, its application in food and pharmaceutical products is limited due to its poor aqueous solubility. The current work is significant to improve the aqueous solubility of xanthone and to protect xanthone from external environment through spray drying. The improved aqueous solubility of xanthone microcapsules is useful for functional food product development.