The unregulated and extensive application of synthetic compounds, such as preservatives, pesticides, and drugs, poses serious concerns to the environment, food security, and global health. Essential oils (EOs) are valid alternatives to these synthetic chemicals due to their therapeutic, antioxidant, and antimicrobial activities. Lavender essential oil (LEO) can be potentially applied in food, cosmetic, textile, agricultural, and pharmaceutical industries. However, its bioactivity can be compromised by its poor stability and solubility, which severely restrict its industrial applications. Encapsulation techniques can improve the functionality of LEO and preserve its bioactivity during storage. This review reports recent advances in the encapsulation of LEO by different methods, such as liposomes, emulsification, spray drying, complex coacervation, inclusion complexation, and electrospinning. It also outlines the effects of different processing conditions and carriers on the stability, physicochemical properties, and release behavior of encapsulated LEO. Moreover, this review focuses on the applications of encapsulated LEO in different food and non-food products. Display omitted •Lavender essential oil (LEO) has therapeutic, antioxidant, and antimicrobial activities.•The encapsulation of LEO improves its bioactivity.•LEO can be encapsulated by a wide range of techniques.•Encapsulated LEO has several applications in food, agriculture, textile, and pharmaceutics.