Lemon balm (Melissa officinalis) is an aromatic and medicinal plant, rich in bioactive ingredients and with superior antioxidant activity. The essential oil of this plant is an expensive product, so the use of the by-products of the essential oil industry is particularly useful. The aim of this research was to process Melissa officinalis distillation by-products to develop a series of polyphenol-rich formulations. In the present research, lemon balm was distilled in a laboratory-scale distiller, and the recovered by-product was used for further successive extractions with acetone and water, using a fixed-bed semi-batch extractor. Acetone extract exhibited relatively poor results as far as yield, phenolic composition and antiradical activity are concerned. However, the aqueous extract presented high yield in both total phenolic content (i.e., 111 mg gallic acid equivalents (GAE)/g, on a dry herb basis (dw)), and anti-radical capacity (205 mg trolox equivalents (TE)/g dw). On a dried extract basis, the results were also impressive, with total phenols reaching 322 mg GAE/g dry extract and antiradical capacity at 593 mg TE/g dry extract. The phenolic components of the extract were identified and quantified by HPLC-DAD. Rosmarinic acid was the major component and amounted to 73.5 mg/g dry extract, while the total identified compounds were quantified at 165.9 mg/g dry extract. Finally, formulations with two different wall materials (gum arabic–maltodextrin and maltodextrin) and two different drying methods (spray-drying and freeze-drying) were applied and evaluated to assess their performance, yield, efficiency and shelf-life of total phenolic content and rosmarinic acid concentration. From the present investigation, it is concluded that after one year of storage, rosmarinic acid does not decrease significantly, while total phenolic content shows a similar decrease for all powders. According to the yield and efficiency of microencapsulation, maltodextrin alone was chosen as the wall material and freeze-drying as the preferred drying method. [ABSTRACT FROM AUTHOR]