The present invention provides a manufacturing method of fragrant and antibacterial functional leather and product thereof. The method includes the steps of: preparing microcapsules, polymerization processing and bonding processing wherein, the microcapsule is composed of core material and shell material enclosing the core material, in which the core material contains fragrant essential oil, and the shell material is mixed with antibacterial material, then a plurality of microcapsules are first polymerized with retanning agent, and then attached and bonded on the surface of the leather together with the retanning agent after polymerization. Thus, the antibacterial material mixed in the shell material of microcapsules can restrict the bacterial growth on the leather surface for a long time, and the shell material of microcapsules may be damaged by external force to make the fragrant essential oil continuously diffusing the fragrance from the shell material to the outside.
