Biodegradable microcapsules of zidovudine (AZT) were prepared using poly(lactide/glycolide) by the solvent evaporation technique. The objective of this project was to focus on the effect of several formulation and processing factors on the efficiency of encapsulation, surface morphology, and drug release profiles. When the drug was incorporated as powder or as aqueous suspension containing a high amount of insoluble particles, to the organic phase the surface of the microcapsules was appeared to be wrinkled. The efficiency of encapsulation decreased when AZT powder was dispersed directly into the organic solvent instead of adding as an aqueous solution. When the relative volume of the aqueous phase containing 1% PVA was changed from 25 up to 125% of the volume of the organic phase, the efficiency of encapsulation, surface morphology, and release profiles did not change significantly. The efficiency of encapsulation decreased from 9 to 3.8% when the drug loading was increased from 10 to 50% of the weight of the polymer.