Display omitted •Imidazolium-based ionic liquids (ILs) were encapsulated in methacrylate polymer microcapsules.•Polymer-encapsulated ILs were dispersed in non-polar oils at concentration that exceeds their solubility limit.•Polymer-encapsulated ILs led to a reduction of friction in steel/steel sliding contacts.•Encapsulated imidazolium-based IL does not tribochemically react at steel surfaces. While ionic liquids (ILs) have attracted much attention as potential next-generation lubricant additives, their implementation in oil formulations has been hindered by their limited solubility in hydrocarbon fluids and corrosivity. Here, we encapsulate an oil-insoluble IL that has been studied in lubrication science, namely 1-hexyl-3-methylimidazolium bis(trifluoromethanesulfonyl)imide (HMIMTFSI), within poly(ethylene glycol dimethacrylate-buytl methacrylate copolymer) (poly(EGDM-c-BMA)) microshells using a mini-emulsion polymerization process. The synthesized poly(EGDM-c-BMA)-encapsulated HMIMTFSI microparticles are shown to be dispersible in a non-polar, synthetic oil (i.e., poly-α-olefin). Tribological experiments indicated that the microcapsules act as an additive reservoir that reduces friction by releasing the encapsulated IL at the sliding interface following the mechanical rupture of the polymer shell. X-ray photoelectron spectroscopy (XPS) measurements provided evidence that HMIMTFSI does not tribochemically react on steel surfaces to create a reaction layer, thus suggesting that this IL reduces friction by generating a solid-like, layered structure upon nanoconfinement at sliding asperities, as proposed by previous nanoscale studies. The results of this work do not only provide new insights into the lubrication mechanism of ILs when used as additives in base oils in general, but also establish a new, broadly-applicable framework based on polymer encapsulation for utilizing ILs or other compounds with limited solubility as additives for oil formulations.