This paper describes the denaturation of protein drugs by dichloromethane (DCM) during the primary emulsification step of the microencapsulation process using biodegradable polymer matrix for controlled-release application. It was found that interaction of proteins such as tetanus toxoid (TT), diphtheria toxoid (DT), ovine growth hormone (oGH), and human chorionic gonadotropin-based antifertility vaccine (beta-hCG-TT) with DCM during primary emulsification stages of particle formulation led to the precipitation of the proteins at the aqueous organic interface with concomitant reduction in their immunoreactivity. On the other hand, the B subunit of E. coli enterotoxin (LTB) was found to be comparatively stable toward the denaturing action of DCM. Attempts were made to overcome the DCM-induced denaturation by incorporation of stabilizers during the primary emulsification step of the particle formulation. Of the many additives tested to overcome the DCM-induced denaturation of proteins, serum albumins and polyvinyl alcohol (PVA) showed promising results in terms of retention of the immunoreactivity of the protein. TT stabilized by the incorporation of serum albumin during the primary emulsification step not only showed immunoreactivity in vitro, but also invoked antibody titers in rats comparable to those obtained for the native protein molecules. Incorporation of 2.5% of serum albumins in the internal aqueous phase not only protected the protein from the degradative action of DCM but also led to stabilized primary emulsion, which is necessary for uniform entrapment of protein drugs in the polymer matrix.