We report on a novel method for the encapsulation of highly water soluble materials by using layer-by-layer (LbL) polyelectrolyte self-assernbly. State of the art polyelectrolyte self-assembly LbL coating and encapsulation methods are only applicable to insoluble or poorly water soluble template materials, because the process is performed in water causing dissolution of the solid template. Our method extends the material spectrum to highly water soluble template materials by using non-ionized polyelectrolytes in an organic phase (reverse-phase) instead of polyelectrolyte salts in an aqueous environment. By using the reverse-phase layer-by-layer (RP-LbL) technique, we have demonstrated the direct encapsulation of proteins, glucose, vitamin C, and inorganic salts in the solid state. Multilayer deposition was proven. layer thickness was determined by AFM, and the advantage of the method to prepare powders of encapsulated materials was demonstrated. The method is simple, robust, and applicable to a broad range of substances with potential applications in several industries.