A submicron capsule, encapsulated osmanthus fragrance (OF) with octyl-grafted amphiphilic alginate-amide derivative, was prepared by emulsification-gelation technique. Then, the submicron capsules were applied to cosmetics as Pickering emulsifier. The effect of the content of each material on the mean particle size of the submicron capsules was investigated in detail. The morphology and structures of the submicron capsules were measured by transmission electron microscope (TEM), dynamic light scattering (DLS), Fourier transformation infrared spectroscopy (FTIR), thermogravimetric analysis (TGA) and ultraviolet spectrum (UV). TEM images reveal morphology of the submicron capsules, and DLS showed that the mean size of the submicron capsules was about 210 nm. FTIR illustrated that OF was encapsulated into the submicron capsules. TGA displayed that the thermal stability of the fragrance submicron capsules was improved compared with that of pure OF. Ultraviolet-visible (UV) analysis showed that the encapsulation efficiency and loading capacity were 68.2 and 22.3%, respectively. Furthermore, optical microscopy and multiple light scattering technique indicated that the cosmetic emulsion prepared by the fragrance submicron capsules had better stability than that by traditional surfactants. The sensory evaluation test also confirmed that the fragrance submicron capsule can give the cosmetic emulsion a better fragrance retention effect.