<p>Low bioaccessibility is the main drawback of polyphenols extracted from plant residues, resulting in a significant reduction of their biological potential after gastrointestinal digestion. This study evaluated the efficacy of the combined process, solid-state fermentation (SSF) and microencapsulation, in preventing post-digestion loss of biological activity of phenolic extract from watermelon peel, a popular fruit byproduct. Specifically, the study investigated the encapsulation conditions for fermented watermelon peel extract (FWPE) in alginate particles and further determined the size, morphology, polyphenol release and bioaccessibility along with the post-digestion antioxidant activity of the encapsulated FWPE particle (E-FWPEP). The optimal encapsulation conditions for maximum encapsulation efficiency (EE) were identified as 5% FWPE, 0.6&#xa0;M calcium chloride, 0.7% alginate, and 64&#xa0;rpm stirring speed, under which the EE was 92.8%. In terms of size and morphology, the E-FWPEP showed a uniform spherical shape and size with an average diameter of 136.8&#xa0;µm. Polyphenol release was observed to be pH-dependent, with no release at pH 1.5–3.5 and high release at pH 7.2, indicating that E-FWPEP can prevent polyphenol destabilization in the stomach and allow release in the small intestine. Kinetic studies further elucidated the mechanisms of polyphenol release, with pH-dependent particle swelling playing a key role. For polyphenol bioaccessibility and post-digestion antioxidant potential, in vitro gastrointestinal digestion studies revealed the highest values for E-FWPEP, followed by those for FWPE and the unfermented control had the lowest values. Overall, the study highlights the efficacy of the combined process, SSF and microencapsulation, in improving the bioavailability of bioactive compounds in watermelon waste extract, which contributes to the development of novel sustainable products for food, nutraceutical and pharmaceutical applications.</p> Graphical Abstract <p></p>