Encapsulation of microparticles in droplets has profound applications in biochemical assays. We investigate encapsulation of rigid particles (polystyrene beads) and deformable particles (biological cells) inside aqueous droplets in various droplet generation regimes, namely, squeezing, dripping, and jetting. Our study reveals that the size of the positive (particle-encapsulating) droplets is larger or smaller compared to that of the negative (empty) droplets in the dripping and jetting regimes but no size contrast is observed in the squeezing regime. The size contrast of the positive and negative droplets in the different regimes is characterized in terms of capillary number C a and stream width ratio ω (i.e., ratio of stream width at the throat to particle diameter ω = w / d p). While for deformable particles, the positive droplets are always larger compared to the negative droplets, for rigid particles, the positive droplets are larger in the dripping and jetting regimes for 0.50 ≤ ω ≤ 0.80 but smaller in the jetting regime for ω < 0.50. We exploit the size contrast of positive and negative droplets for sorting across the fluid-fluid interface based on noninertial lift force (at R e ≠1), which is a strong function of droplet size. We demonstrate sorting of the positive droplets encapsulating polystyrene beads and biological cells from the negative droplets with an efficiency of ∼95% and purity of ∼65%. The proposed study will find relevance in single-cell studies, where positive droplets need to be isolated from the empty droplets prior to downstream processing. © 2019 Author(s).