Biofertilizers, namely Rhizobium and biocontrol agents such as Pseudomonas and Trichoderma have been well established in the field of agricultural practices for many decades. Nevertheless, research is still going on in the field of inoculant production to find methods to improve advanced formulation and application in fields. Conventionally used solid and liquid formulations encompass several problems with respect to the low viability of microorganisms during storage and field application. There is also lack of knowledge regarding the best carrier in conventional formulations. Immobilization of microorganisms however improves their shelf-life and field efficacy. In this context, microencapsulation is an advanced technology which has the possibility to overcome the drawbacks of other formulations, results in extended shelf-life, and controlled microbial release from formulations enhancing their application efficacy. This review discusses different microencapsulation technologies including the production strategies and application thereof in agricultural practices.