Microcapsule of Propranolol HCl with Cellulose Acetate Phthalate (CAP) by coacervation-phase separation method was studied. Encapsulation was carried out in the CAP-liquid paraffin-acetone ethanol solvent system. The optimum weight ratio for microencapsulation in the CAP-liquid paraffin-solvent system was 1.32:89.18:9.50 or 1.65:89.42:8.93. The wall thickness of microcapsules increased according to increasing of CAP concentration, but dissolution rate decreased. The dissolution of propranolol-HCl in simulated gastric and intestinal fluid test solution was completed within 3 min., but T50% of propranolol HCl from 10.0% CAP-microcapsules were 390 min. and 210 min. respectively. The released amount from 12.5% CAP-microcapsules was 41.8% within 720 min. in simulatd gastric fluid test solution and T50% of those in simulated intestinal fluid test solution was 250 min.