Bacillus megaterium encapsulated in calcium alginate microcapsules was prepared and tested for its efficacy against sheath blight disease of rice. In laboratory conditions, the aqueous suspension (1:100, v/v in potato dextrose agar) of the bacterial microcapsules (1010 spores/ml) inhibited mycelial growth of Rhizoctonia solani (>99 %) after the microcapsules were produced and stored for 12 months at room temperature (28 ± 2 °C).