Abstract: Both a low concentration of dissolved oxygen and the toxicity of a high concentration of BTEX inhibit the bioremediation of BTEX in groundwater. A novel method of preparing encapsulated oxygen-releasing beads (encap-ORBs) for the biodegradation of BTEX in groundwater was developed. Experimental results show that the integrality and oxygen-releasing capacity of encap-ORBs exceeded those of ORBs. The use of polyvinyl alcohol (PVA) with high M.W. to prepare encap-ORBs improved their integrality. The encap-ORBs effectively released oxygen for 128 days. High concentration of BTEX (480 mg L−1) inhibited the biodegradation by the free cells. Immobilization of degraders in the encap-ORB alleviated the inhibition. Scanning electron microscope analysis reveals that the BTEX degraders grew on the surface of encap-ORB after bioremediation. The above results indicate that the encap-ORBs were effective in the bioremediation of BTEX at high concentration in groundwater.