Microcapsules containing fragrant oil (Foral oil) were synthesized via the in situ polymerization method using melamine-formaldehyde (M-F) as a wall material. The encapsulation efficiency and other physical properties were analysed with varying formaldehyde/melamine (F/M) mole ratio and pH of emulsion medium. The pH of the reaction medium was varied from 5.0-6.0 and the F/M molar ratio, 2.3 similar to 5.5. Microcapsules containing fragrant oil were synthesized successfully and their particle sizes ranged from 12-15 mum. Encapsulation efficiency of fragrant oil varied from 67-81%. It was found that both pH and F/M molar ratio have an effect on the separation of M-F pre-polymer, consequently the morphology of the surface of the microcapsule was changed as well as encapsulation efficiency. The encapsulation mechanism, focusing on the liquid-liquid phase separation of methylolmelamines and formation of M-F precursor particle, was described to explain the surface morphology and encapsulation efficiency.