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In recent years, there has been increased interest in antioxidant-rich products by consumers wanting to enhance the health benefits of their diet. Chocolate has been identified as a natural source of antioxidant compounds, which resulted in the development of polyphenol-enriched chocolate products that are now available commercially. This study investigated the use of phenolic compounds extracted from peanut skins as a novel antioxidant source for the enrichment of milk chocolate. The extracts were encapsulated with maltodextrin to lessen their bitterness. Antioxidant potential of the encapsulated peanut skin extracts was evaluated by the 2,2-diphenyl-1-picrylhydrazl radical quenching assay. Encapsulated peanut skins were found to have a corrected Trolox equivalency of 31.1 μmol/g of chocolate up to 0.8% (w/w). To produce a product with an antioxidant content similar to that of dark chocolate yet which maintained the milder flavor of milk chocolate, the best estimate threshold of encapsulated peanut skin extract in chocolate was 0.9 % (w/w) based on the standard method (American Society of Testing Materials; ASTM E-679). Consumer liking of milk chocolate enhanced by adding subthreshold (0.8 % (w/w)) inclusion levels of encapsulated peanut skin extract was found to be at parity with milk chocolate as a control. [ABSTRACT FROM AUTHOR]