Recent advances in tissue engineering application for medical intervention has created a need for three-dimensional (3D) cellular microenvironment in the form of cellular microencapsulation. Cellular microencapsulation can be used in several applications such as in vitro drug screening as well as cellular transplantation. It is important to note, however, that despite all the benefit from the cells, the capsule itself also has a major role. Significant impact and even clinical risks can present if the capsule is not biocompatible or even toxic. Hence, careful consideration on the materials and more importantly the fabrication process of the capsule is needed. In this work, we presented a method for cellular encapsulation using oil immersion technique. Briefly, suspension of K562 cells and collagen was injected into the mineral oil on a cell strainer. Microcapsule then washed with PBS and immersed with culture medium. Photomicrograph analysis was performed to evaluate the shape as well as to measure the volume of the microcapsule. Immunohistochemistry staining with Propidium Iodide (PI) was used to confirm K562 entrapment within the microcapsule. Cellular microencapsulation using oil immersion technique resulted in a rounded sphere. The increased volume of cells-hydrogel suspension resulted in bigger diameter and volume of the capsule. Due to the nature of the immersion process, a layer of oil could be found outside the capsule. The volume of the oil on the border of the capsule also increased with higher hydrogel-cells suspension. PI-stained K562 cells were found within the microcapsule, confirming that K562 cells were indeed entrapped within the microcapsule. In conclusion, oil immersion technique provides a quick, easy, and feasible method to produce cellular microencapsulation.