Degradation of trichloroethene (TCE) by separately encapsulated and co-encapsulated nanoscale zero-valent iron (nZVI) and bacterial degraders was investigated. Pseudomonas putida F1 and Dehalococcoides species BAV1 were used in the separate encapsulation and co-encapsulation, respectively. Results from batch experiments showed that the encapsulation systems were able to degrade 100% of TCE (10 mg/L to less than a detection limit of 0.2 μg/L) in 3 h. After 3 h, 10 mg/L of TCE was re-dosed and the co-encapsulation system was able to again completely remove TCE. Common TCE degradation by-products, dichloroethene and vinyl chloride, were not detected. The first order model was suitable for describing TCE degradation kinetics. The initial TCE degradation was mainly chemical while after the re-dosing biodegradation dominated due to exhaustion of nZVI caused by nitrate and possibly phosphate and chloride in the test medium. The encapsulation systems can overcome problems associated with limited activity longevity of nZVI under field conditions, residual TCE and chlorinated degradation by-products. The systems can potentially be a technique for in-situ remediation of groundwater.