The nanoencapsulation of hydrophobic compounds by miniemulsion polymerization, a convenient one-step encapsulation technique for nanocapsules, was investigated in terms of the thermodynamics and kinetics. The encapsulation was achieved by polymerization inducing phase separation within minidroplets dispersed in an aqueous phase. Thermodynamic factors (the level and type of surfactant, the level of the hydrophilic comonomer, and the monomer/paraffin ratio), kinetic factors (the level of the crosslinking agent or chain-transfer agent), and nucleation modes were all found to have a great influence on the latex morphology. Specifically, for a styrene/paraffin system, there were optimum levels of sodium dodecyl sulfate (1.0 wt %), the hydrophilic comonomer (1.0 wt % methyl acrylate acid), and the chain-transfer agent (0.2 wt % n-dodecanethiol) for obtaining well-defined nanocapsules of paraffin with a styrene/paraffin ratio of 1:1. When the styrene/paraffin ratio was reduced, however, it was more difficult to achieve a fully encapsulated particle morphology. Homogeneous nucleation could compete with encapsulation, and this resulted in a pure polymer particle and a half-moon morphology. Conditions were also found under which complete encapsulation could be observed with a water-soluble initiator (potassium persulfate), contrary to certain reports. Replacing potassium persulfate with an oil-soluble initiator (2,2-azo-bisisobutyronitrile) had little influence on the morphology under those conditions. (C) 2004 Wiley Periodicals, Inc.