Encapsulated polyunsaturated fatty acids which can be incorporated into a baked good dough or batter without smearing or dissolution of the encapsulated product contains film-coated oil droplets encapsulated by a matrix material, a liquid plasticizer which plasticizes the matrix material, and an acidic antioxidant dispersed throughout the plasticized matrix material which helps to prevent oxidation of the polyunsaturated fatty acids and the production of a fishy taint or malodors and mal-flavors. The matrix material includes a starch component which helps to avoid a rubbery consistency and texture and promotes extrudability, and a protein component, which hardens the encapsulated product and prevents substantial smearing and dissolution during dough or batter mixing and baking. The matrix material protein content is from about 25% to about 77.5% by weight of the matrix material. The protein content of the encapsulated product is from about 15% to about 65% by weight, of the encapsulated product.
