Abstract Amphipathic chlorophyllase, in the form of a ternary micellar (TMS) or reverse micellar system (RMS) medium, was encapsulated in alginate hydrogels with yields of 100 and 60% respectively. In comparison, chlorophyllase in aqueous buffer was retained in the hydrogel to low levels (30%). Specific activities of chlorophyllase in TMS/alginate and RMS/alginate were 0.008 and 0.007 μM chlorophyll/mg protein min, respectively. A novel approach to encapsulating chlorophyllase involved emulsification/internal gelation of the chlorophyllase–TMS or –RMS system. Higher specific activity was observed (0.04 μM chlorophyll/mg protein min) in TMS/alginate microbeads. An examination of the partition behavior of chlorophyll substrate between hydrogel and hexane shows that chlorophyll demonstrates a 7–10-fold higher partition coefficient when in the TMS or RMS hydrophobic gel than in pure alginate hydrogel. With the same amount of organic solvent introduced in the form of a micellar medium into alginate sol, the RMS shows a higher capability to enhance the hydrophobicity of alginate beads, as measured through the partition coefficient of chlorophyll, than the TMS. The extent of enhancement of the partition coefficient depends on the amount and hydrophobicity of the components introduced into alginate, affecting the hydrophobic–hydrophilic balance of the gel.