In this communication, a new microencapsulation method is reported to entrap solid drug powder in an aqueous system. A hydrophobically modified, random polyacrylamide derivative was used as a stabilizer: with a hydrophilic back bone and hydrophobic side chain, it showed good dispersing and stabilizing effects in the preparation of microcapsules. The preparation of streptomycin microcapsules, using poly(lactide) and poly(caprolactone), showed the successful entrapment of streptomycin powder which is readily soluble in water (solubility larger than 20 mg/ml). In addition, a low concentration of stabilizer (0.25%) is used and a short preparation process is also an advantage of the method.