Coaxial electrospinning is a robust technique for one-step encapsulation of fragile, water-soluble bioactive agents, including growth factors, DNA and even living organisms, into core-shell nanofibers. The coaxial electrospinning process eliminates the damaging effects due to direct contact of the agents with organic solvents or harsh conditions during emulsification. The shell layer serves as a barrier to prevent the premature release of the water-soluble core contents. By varying the structure and composition of the nanofibers, it is possible to precisely modulate the release of the encapsulated agents. Promising work has been done with coaxially electrospun non-woven mats integrated with bioactive agents for use in tissue engineering, in local delivery and in wound healing, etc. This paper reviews the origins of the coaxial electrospinning method, its updated status and potential future developments for controlled release of the class of fragile, water-soluble bioactive agents. (C) 2014 Elsevier B.V. All rights reserved.