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Polyelectrolyte (PE) and nanocomposite (NC) microcapsules fabricated by layer-by-layer technique have been of great interest in the past decade as novel entities for cargo encapsulation and delivery as well as for diagnostic purposes. The unique physicochemical properties of polymers and inorganic nanoparticles used in layer-by-layer synthesis of PE and NC microcapsules make them promising in various fields, such as storage, catalysis, cells imaging, controlled drug release, and targeted drug delivery. However, the requirement of the cargo encapsulation is that the cargo should have a relatively large molecular weight in order to avoid the leakage from the capsules. In this review, recent progress in the design and functionalization of PE and NC microcapsules using sol-gel method for storage of small cargos have been presented. Moreover, various remote exposures on the permeability of organic/inorganic composite microcapsule shells such as ultrasound, magnetic field gradient, laser, and microwave radiation have been observed. Finally, the description and discussion of the new trends and perspectives for improved functionality of PE microcapsules are the major topic of this progress report. [ABSTRACT FROM AUTHOR]