Microencapsulation in emulsion droplets has great potential for various applications such as food which require formation of highly stable emulsions. Bacterial-emulsion interactions affect the physiological status of bacteria while bacterial cell characteristics such as surface-active properties and metabolic activity can affect emulsion stability. In this study, the viability and growth of two different bacterial species, Gram-negative Escherichia coli and Gram-positive Lactobacillus paracasei, encapsulated in water-in-oil (W/O) droplets or as planktonic cells, were monitored and their effect on droplet stability was determined. Microencapsulation of bacteria in W/O droplets with growth media or water was achieved by using a flow-focusing microfluidic device to ensure the production of highly monodispersed droplets. Stability of W/O droplets was monitored during 5 days of storage. Fluorescence microscopy was used to observe bacterial growth behaviour. Encapsulated cells showed different growth to planktonic cells. Encapsulated E. coli grew faster initially followed by a decline in viability while encapsulated L. paracasei showed a slow gradual growth throughout storage. The presence of bacteria increased droplet stability and a higher number of dead cells was found to provide better stability due to high affinity towards the interface. The stability of the droplets is also species dependent, with E. coli providing better stability as compared to Lactobacillus paracasei.