A styrene-maleic acid copolymer (PSMA)encapsulated 2-[(2-methoxy-4-nitrophenyl) azo]-N-(2-methoxyphenyl)- 3-oxobutyramide (PY74) dispersion was prepared by the phase-separation technique. A surface-modified PY74 dispersion was prepared with PSMA sodium as a dispersant by the milling method. Furthermore, the two dispersions were applied to formulate pigment inks. The colloidal properties of these two dispersions were compared. The printing and color performance of the prepared inks were also investigated. The results show that the PSMA-encapsulated PY74 dispersion with a small particle size had higher stabilities of NaCl concentration, pH value, and temperature than the surface-modified PY74 dispersion. The apparent viscosity of the PSMA-encapsulated PY74 dispersion changed little, while it changed greatly in the surface-modified PY74 dispersion with an increase of the shear rate from 10 to 100 s(-1). The ink printing and color performance of printed Fabrics indicated that the PSMA-encapsulated PY74 dispersion was more suitable for the preparation of inkjet printing ink than the surface-modified PY74 dispersion. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 119: 371-376, 2011