It has been demonstrated that calcium alginate capsules can be used as an asphalt healing system by pre-placing rejuvenator (healing agent) into the asphalt mix and releasing the rejuvenator on demand (upon cracking). This healing mechanism relies on the properties of capsules which are determined by the capsule preparation process. In this study, to optimize the calcium alginate capsules, capsules are prepared using varying Alginate/Rejuvenator (A/R) ratios. Light microscope microscopy and Environmental Scanning Electron Microscope (ESEM) are employed to characterize the morphology and microstructure of these capsules. Thermal stability and mechanical property are investigated by thermogravimetric analysis (TGA) and compressive tests. The testing results indicate that higher alginate content results in smaller diameter and lower thermal resistance, but higher compressive strength. The optimum A/R ratio of calcium alginate capsules is found to be 30/70. To prove the effectiveness of the optimized capsules, the capsules are embedded in asphalt mortar beams and a bending and healing program is carried out. The effect of capsule shell material on the mechanical response of asphalt mixture is evaluated through three-point bending on the mortar beams embedded with blank capsules (without the healing agent). Aged mortar beams containing alginate capsules encapsulating rejuvenator demonstrate a higher strength recovery after bending tests, which indicates effective healing due to the release of the rejuvenators from the capsules.