Low encapsulation efficiency, incomplete and erratic release profiles are the most common features of controlled released protein delivery systems employing biodegradable polymers. In the present study, lysozyme as a model protein was encapsulated in biodegradable microspheres using solvent evaporation method and the effect of amphiphilic stabilizer, a basic salt and a lyoprotectant on microparticle formulation was evaluated. Incorporation rat serum albumin ( RSA) in the internal aqueous phase during emulsion increased the encapsulation efficiency of lysozyme and maintained the bioactivity. Use of NaHCO3 improved the encapsulation efficiency of lysozyme from 15 - 94%, but at the cost of reduced in vitro release characteristics. Incorporation of both RSA and NaHCO3 improved the bioactivity of lysozyme and decreased burst release of the protein from the polymer particle, but reduced the encapsulation efficiency from 90 - 70%. Addition of sucrose in the internal aqueous phase lowered the encapsulation efficiency which was restored by its addition in the external aqueous phase. Maintenance of internal aqueous phase pH close to the iso-electric point of the protein and osmotic balance between the internal aqueous phase and the external aqueous phase during solvent evaporation method helped in better encapsulation of the protein drug. In vitro release of the lysozyme correlated with the effect of different excipients on entrapment in polymer matrix. Entrapment efficiency as high as 76%, low burst effect and high bioactivity of the entrapped lysozyme was observed from the polymer particles. Use of RSA, sucrose and NaHCO3 helped in a co-operative way towards the formulation of particles entrapping bioactive lysozyme.