Natural polyphenols are valuable nutritional compounds. They are antioxidants which can scavenge free radicals and prevent cancer and many other diseases. However, these natural ingredients do not have high stability during time and are very sensitive to light and heat. On the other hand, some of these polyphenols are very bitter. So, their use in foods or drugs is limited. Encapsulation is a hopeful approach for solving these problems. Lemon balm which has phenolic compounds and antioxidant effect and also creates lemon aroma, is a good choice to produce functional foods. In this study, lemon balm extract as a source of natural antioxidants was encapsulated in the calcium alginate hydrogels. To optimize the encapsulation process, three variables of alginate percentage, calcium chloride concentration, and the lemon balm extract concentration were used at three levels. The results showed that maximum encapsulation efficiency was achieved in 1.84 % alginate solution concentration, 0.4 % lemon balm extract concentration, and 0.2 % calcium chloride concentration. The maximum encapsulation efficiency and loading capacity of extract in alginate hydrogels were 39.5 % and 14.36 mg/g respectively. Encapsulation efficiency and loading capacity were reduced to 26.97 % and 12.83 mg/g by applying chitosan coating on the surface of hydrogels. The antioxidant activity of the lemon balm extract of 0.4 % and the encapsulated extract were calculated 84.5 and 36.5 % respectively. Release of extract in the simulated gastrointestinal systems was investigated. Results showed that most of antioxidant compounds were released in the gastric fluid. Chitosan coating reduced the release of extract from 71.59 to 51.78 % indicating this coating acts as a barrier.Scanning electron micrographs showed the surface structure of the alginate hydrogels.FTIR spectra of hydrogels with and without lemon balm extract showed that the hydrogel did not make new connection with lemon balm extract. Therefore, the alginate hydrogel is a suitable material for encapsulation of active compounds. Keywords : Encapsulation, Lemon balm extract, Alginate hydrogel, Chitosan