Scaevola spinescens is endemic to Australia and traditionally used as a medicinal plant. Current research has linked the plant with antibacterial, antiviral, anti-inflammatory, and anticancer properties, however, its use is limited due to the instability of bioactive compounds and inconvenience of the extract. Therefore, encapsulation is required to improve its physicochemical properties and widen its scope in food and pharmaceutical applications. This study investigated the influence of major spray drying conditions and common carrier materials on the physicochemical and antioxidant properties of S. spinescens extract to identify the most suitable encapsulation conditions. The results showed that different carrier material concentrations had significant impacts on total phenolic compounds (TPC), flavonoids, saponins, as well as antioxidant activities of the powder, but had less impact on saponins. Increasing carrier material concentration decreased recovery yield and increased moisture content. Inlet air temperature did not greatly affect bioactive compound concentrations and antioxidant activity, however, significantly affected recovery yield, moisture content, water activity, bulk density and colour attributes of the powder. The feed rate did not affect concentrations of flavonoids and saponins, but higher TPC was observed at lower feed rates. The type of carrier material significantly affected TPC, flavonoids, and saponins, as well as antioxidant activities. Samples using whey protein had highest concentrations of TPC, but also lowest levels of flavonoids and recovery yield. Samples using acacia gum displayed highest concentrations of saponins. Whey protein showed significantly higher moisture content and conversely, low hygroscopicity. Maltodextrin of dextrose equivalent 4, 10 and 18 also showed low hygroscopicity, as well as high recovery yields. Overall, the most suitable encapsulating conditions were recommended as a carrier concentration of 10 g/100 mL, inlet air temperature of 140 °C, feed rate of 12 mL/min, and with carrier material consisting of maltodextrin (dextrose equivalent 10 or 18) for overall encapsulation performance, or acacia gum for maximum retention of TPC and saponins. Encapsulated powder prepared using the recommended conditions produces an optimal product with strong physical, phytochemical and antioxidant properties allowing for further utilization in food or pharmaceutical applications.