Vitamin D is one of the fat-soluble vitamins, important for human nutrition. However, its low polarity and unstability are the main bottleneck in its food applications. It is generally considered that encapsulation improves the stability through protection from the adverse environmental conditions. The objective of present study was to quantify the processing and storage stability of encapsulated vitamin D₂ in milk systems. Vitamin D₂ fortified ghee(clarified butter fat) was taken as control sample which was compared with whey protein isolate (WPI) and Sodium caseinate (SC) stabilized nano-emulsions. All samples were stored under refrigerated condition at 4 ± 2°C temperature in capped glass vials. After 30 d storage period, concentration of vitamin D₂ in gheereduced from 50.2 ± 1.1ppm to 21.9 ± 0.5ppm (56.37%) while during same period in WPI- and SC- stabilized nano-emulsions this concentration reduced from 37.66 ± 1.5 ppm to 22.97 ± 0.5 ppm (39%) and 35.81 ± 0.7 ppm to 24.00 ± 0.1 ppm (33.97%), respectively. Effect of encapsulation was further studied in liquid milk systems to assess its impact on the processing and storage stability of vitamin D₂. Fresh skim milk was fortified with WPI- and SC-stabilized dried emulsions and subjected to pasteurization and sterilization. Pasteurization leads to 39.36 and 37.28% loss of vitamin D₂ in milk fortified with WPI- and SC-stabilized dried emulsions, respectively. During 7 d storage of pasteurized milk, vitamin D₂ concentration reduced by 54.95 and 48.02%, respectively, for milk fortified with WPI- and SC-stabilized dried emulsions. Sterilization leads to 17.32 and 3.35% loss of Vitamin D₂ in milk fortified with WPI- and SC-stabilized dried emulsions, respectively. During sterilization though the processing loss of vitamin D₂ was low in milk fortified with casein proteins coated particles as compared with whey proteins coated particles however, during storage period of 90 d WPI was found to provide better stability as compared with sodium caseinate. It is concluded that encapsulation does give protection however, despite encapsulation processing and storage losses of vitamin D₂ in fortified milk was found to be significantly high.