This study presents a method for one-step formation of poly(ethylene oxide) nanofibers incorporating, nanoparticles of a poorly water-soluble compound. Using the new method reported here, nanofiber-nanoparticle composites are fabricated in one step by electrospinning of an oil-in-water microemulsion, in which a model material, propylparaben, has been dissolved within the volatile dispersed phase in the presence of a high-molecular-weight polymer. The approach is based on nanoscale confinement to the dispersed phase of an oil-in-water microemulsion with a volatile oil phase, in which the poorly water-soluble materials are dissolved. Thus, when the thermodynamically stable oil-in-water microemulsion is combined with the rapid evaporation of solvent inherent in the electrospinning process, the droplets are converted into organic nanoparticles embedded within a polymeric nanofiber. In addition to possessing process simplicity, this method exhibits a very high percentage of nanopartide loading with desirable active material properties. Specifically, the diameter of the nanofibers is in the range of 60-185 nm, and propylparaben exists within the nanofiber as nanocrystals of 30-120 nm. These dimensions suggest that the nanofiber nanocrystal composites could serve as a delivery system for water-insoluble materials.