Fluorine-free water repellent agent, AH102, was microencapsulated by interfacial polymerization with polyurethane as shell material to restrict its hydrolysis and improve its dispersibility in water. The appearance of the resultant microcapsules was characterized with optical microscope and scanning electron microscope. Chemical structure of microcapsules was identified with Fourier-transforming infrared spectrometer. The size and size distribution of the microcapsules were determined by laser particle size analyzer. The thermal property of the microcapsules was investigated by thermogravimetric analysis. The stability and dispersibility of the microcapsules in aqueous medium were characterized by evaluating the static water contact angles of the treated cotton fabrics with the emulsions of unencapsulated and microencapsulated AH102 at different storage intervals. The results showed that AH102 was successfully encapsulated and its stability and dispersibility in water were greatly improved. As expected, the emulsion of the microencapsulated AH102 became more stable than that of the unencapsulated one at water repellence to cotton fabric with increasing storage intervals. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 119: 330-335, 2011