Essential oils (EO) are effective natural antimicrobials but are susceptible to oxidation. Microencapsulation improves EO stability, reduces toxicity, and controls release. The aim of this study was preparation, characterization and antidermatophytic activity of free and microencapsulated cinnamon essential oil (MP). MP were prepared by the spray drying method and the success of MP encapsulation was confirmed by UV-vis spectroscopy, dynamic light scattering (DLS), scanning electron microscopy (SEM), differential scanning calorimetry (DSC) and Fourier transform infrared (FT-IR) spectroscopy. The antifungal effect of EO and MP was evaluated by the broth microdilution method against Microsporum gypseum and Trichophyton mentagrophytes. The checkerboard method was used to assess synergistic interactions. Fluorescence microscopy and scanning electron microscopy were used to investigate the inhibition of hyphal growth by EO and MP. A cytotoxic assay was performed using the VERO cell line. Microencapsulated cinnamon essential oil was found to be micrometric, with a round, regular structure. The minimum inhibitory concentration of EO was found to be between 125–250μg/mL, while that of MP was 220.5–440.5μg/mL. EO was synergistic with fluconazole while microencapsulated oil was less cytotoxic than EO.