The suspension copolymerization of methyl methacrylate with hydroxy-functional poly(ethylene glycol) monomethacrylate (PEGMA) by atom transfer radical polymerization (ATRP) yielded soluble, controlled-molecular-weight amphiphilic copolymers (weight-average molecular weight/number-average molecular weight < 1.3). Despite extensive partitioning of PEGMA into the water phase, copolymers containing up to 24 mol % PEGMA were formed in the oil phase, from comonomer feeds containing 30 mol % PEGMA Conversions by suspension polymerization were comparable to those obtained by solution polymerization, at over 70%. Suspension copolymers with high PEGMA contents contained high-molecular-weight polymer formed by uncontrolled polymerization, unless poly(vinyl pyrrolidone) was added to displace the growing polymer from the interface. The addition of diethylene glycol dimethacrylate gave capsules at 17 mol % PEGMA with ATRP, whereas conventional free-radical polymerization required 24 mol % PEGMA to form capsules. The lower PEGMA level required for capsule formation with ATRP was attributed to the lower rates of propagation and crosslinking and to improved incorporation of PEGMA into the final gels. Suspension ATRP with 24 mol % PEGMA in the feed gave two-layer capsule walls consisting of an inner layer visible by transmission electron microscopy and an outer layer visible by both transmission electron microscopy and environmental scanning electron microscopy, which indicated a compositional gradient across the capsule wall. (c) 2005 Wiley Periodicals, Inc.