Lycopene is a highly potent antioxidant that is prevalent among dietary carotenoids. However, its use in food formulations is restricted due to its poor water-solubility and proneness to oxidation. The aim of this research was to encapsulate lycopene in yogurt using emulsion technology for improving its stability during processing and storage, in order to diversify a widely consumed food product and enhance its nutritional value. Confocal laser microscopy data showed that the incorporation of oil droplets with emulsification did not have a negative effect on the formation and microstructure of yogurt. Syneresis of lycopene-fortified yogurt samples was approximately twice as high compared with plain yogurt at day 7; the ability to retain water was significantly improved with storage time for all emulsified samples. Additionally, storage reduced the Turbiscan Stability Indices (TSI) for all yogurt samples, which suggests that physical stability improved at 4°C. Emulsification resulted in increased oxidation levels due to increased oil content. This effect was ameliorated by lycopene encapsulation, which effectively protected corn oil from oxidation and prevented degradation. This study indicates that emulsification is a promising method for lycopene encapsulation and can be used for developing yogurt with desirable nutritional properties.