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Defatted green microalgae Nannochloropsis oceanica (DGM) is a rich source of bioavailable iron. However, its use in foods results in unacceptable color and taste development. Therefore, the purpose of this study was to investigate strategies to enhance the use of DGM in foods. DGM and inulin were encapsulated (EC) in an oil-in-water emulsion using high-pressure homogenization. To confirm iron bioavailability, C57BL/6 mice were fed an iron-deficient diet (ID) for 2 weeks. The mice were then fed one of the four diets: ID, ID + DGM (DGM), ID + EC (EC50 or EC100) for 4 weeks. To test the stability of DGM as an iron fortificant at two different fortification rates of 17.5 mg Fe/kg (50%) or 35 mg Fe/kg (100%), whole (DGM50/DGM100), encapsulated (EC50/EC100) and color-masked (CM50/CM100) DGM were added to wheat flour (WF) at two different temperatures: 20 °C and 45 °C and were examined for 30 days. Acceptability studies were conducted to determine sensory differences between rotis (Indian flat bread) prepared from WF/EC50/CM50/EC100. The mice consuming EC50/EC100 diets showed comparable iron status to DGM-fed mice, suggesting that encapsulation did not negatively impact iron bioavailability. Addition of EC to wheat flour resulted in the lowest Fe2+ oxidation and color change amongst treatments, when stored for 30 days. There were no differences in the overall liking and product acceptance of rotis amongst treatments at both day 0 and day 21 samples. Our results suggest that EC50 can be effectively used as an iron fortificant in WF to deliver highly bioavailable iron without experiencing any stability or sensory defects, at least until 30 days of storage. [ABSTRACT FROM AUTHOR]