Banana peel, a by-product rich in phenolics and other bioactive compounds, has great potentials as a natural preservative or healthy food ingredient. However, the instability of bioactive compounds derived from banana peel limits their applications, and as such encapsulation is necessary to improve their stability and widen their applications. This study investigated the impact of spray drying conditions and coating materials on the physical, phytochemical, and antioxidant properties of the peel extract to identify the most suitable encapsulation process. The results showed that inlet temperature (ranging from 140 to 180 °C) and feeding rate (3-15 mL/min) did not significantly affect the total phenolic content (TPC) and antioxidant capacity but influenced the moisture content and recovery yield of the powder. The ratio of dry matter in fresh extract-to-coating material (DM-to-CM) (1:1-1:7 (w/w)) did not affect the moisture content. However, it affected the TPC, antioxidant properties, and recovery yield of the powder. Finally, the type of coating materials did not significantly affect TPC and antioxidant properties, but other physical properties, dopamine levels and recovery yield. The most suitable encapsulation conditions were identified as an inlet drying temperature of 150 °C, a feeding rate of 9 mL/min, a ratio of DM-to-CM of 1:1 (w/w), and coating with a combination of maltodextrin M100 and gum acacia. Powder prepared under the most suitable conditions had a spherical shape with a rough surface and had stable TPC under storage conditions of 40 °C for 4 weeks. It also has ideal physical, phytochemical and antioxidant properties and is suitable for further applications.