Polyelectrolyte microcapsules based layer-by-layer assembly method have many applications in biomedical field. This review mainly focuses on the recent development of polyelectrolyte microcapsules addressing the potential challenge regarding efficient drug delivery. Firstly, the paper describes the new design criteria of polyelectrolyte microcapsules for advanced functionality, especially stimuli-responsive capsules. Secondly, the surface decoration of capsules is discussed with respect to the requirement of improved biocompatibility and specific targeting. Thirdly, the mutual interaction between capsules and cells such as cell uptake are discussed. Finally, the applications of capsules in vitro and even in vivo are presented.