In this study, cytotoxicity of ethanol extract of propolis (EEP) originating from Sivas, Turkey was screened against several cancer cell lines, namely PC-3, U87MG, A-549, mPANC96, CaCo-2, MCF-7, HeLa, MDA-MB-231 and a non-tumor cell line HEK293 by MTT assay. The inhibition levels of inducible nitric oxide synthase (iNOS) were also determined by using RAW 264.7 macrophage cells following lipopolysaccharide (LPS) treatment. EEP exhibited significant cytotoxic nitric oxide inhibition activities with an IC50 value of 0.1 +/- 0.1 mu g/ml indicating a high potential as an anti-inflammatory agent. In spite of these promising results and the fact that propolis is a highly nutritive substance, its low solubility and bitter taste limit the applications as a natural supplement. Encapsulation might serve as a good strategy in order to overcome these problems. Complex coacervation was applied where the main focus was on surfactant type, polymer ratio (alginate: gelatin), stirring rate and concentration of core material. The mean particle size of unloaded microparticles were 22.62 mu m obtained with gelatin: alginate ratio of 1: 1 at a stirring rate of 1400 rpm with 2 ml of 1 % (w/v) sodium carboxymethyl cellulose (Na-CMC), whereas addition of EEP at a concentration of 100 mg/ml increased the mean particle size to 36.44 mu m and yielded an encapsulation efficiency of 98.77 %. The cytotoxicities of EEP loaded microparticles were also assessed both on MCF-7 and MDA-MB-231 where similar results were achieved as free EEP which can enhance the possible use of propolis extract in the industry as a natural supplement.