Probiotics provide significant health benefits, but their viability is often compromised during production, storage, and passage through the gastrointestinal tract. These challenges hinder their effective incorporation into functional applications, particularly in dairy functional foods, in which factors such as acidity, oxygen exposure, and storage conditions negatively impact cell survival. The focus was on functional dairy foods, particularly on pasta filata cheeses. Indeed, the use of probiotics in pasta filata cheeses presents significant challenges due to the specific manufacturing processes, which encompass the application of high temperatures and other harsh conditions. These factors can adversely affect the viability and availability of probiotic microorganisms. However, microencapsulation has emerged as a promising solution, offering a protective barrier that enhances probiotic stability, improves survival rates, and facilitates targeted release in the gastrointestinal environment. This review examines the pivotal role of microencapsulation in stabilising probiotics for functional applications, emphasising its relevance in high-value food systems. Functional applications, including foods designed to offer essential nutritional benefits and promote host health, play a crucial role in disease prevention and immune system support, reducing the risk of infections and other physiological impairments. Key microencapsulation technologies are analysed, focusing on their benefits, limitations, and challenges related to scalability and industrial implementation. Additionally, this review discusses strategies to optimise formulations, ensure the sensory quality of final products, and explore future opportunities for expanding innovative applications that align with growing consumer demand for health-promoting solutions.