Probiotics have garnered widespread attention for their various beneficial effects on human health. However, systematic reviews on how probiotics alleviate diseases, their environmental interactions, and encapsulation effects on viability remain scarce. In this review, the beneficial physiological effects of probiotics and the mechanisms by which internal and external environments impair probiotic viability are described. More importantly, the latest encapsulation technologies and the principles of improving probiotic viability in recent years are reviewed. Probiotics can be encapsulated by single-cell self-assembly, emulsions, hydrogels, electrospinning, electrospraying, biofilm, thin-film and novel shell-core microbeads. It is noteworthy that shell-core microbeads can encapsulate probiotics independently in a lipid environment for long-lasting storage stability and better retention of gastrointestinal viability. Additionally, the application of probiotics in food, agriculture, and medicine is discussed. This review will offer valuable insights into the design of novel encapsulation systems for probiotics and further research on probiotic applications.