In this paper, gelatin-arabic gum microcapsules containing Artemsia argyi oil was prepared by complex coacervation firstly, along with its application to textile finishing using 2D resin as a crosslinking reagent was investigated. Scanning electron microscopy (SEM) and Fourier transform infrared spectroscopy (FTIR) were used to investigate the formation of ether bonds between 2D resin and cellulose and/or gelatin-arabic gum microcapsules. The washing durability, strength retention, wrinkle-free performance, formaldehyde content, release property and antibacterial property of the finished fabrics were also tested. The results showed that the crease recovery angle of finished fabric was above300°, with the strength retention was above 60% and the released formaldehyde concentration was lower than 75 mg/kg. While the released amount of Artemsia argyi oil was less than 50% after 9 days. Moreover more than 70% antibacterial property could also be obtained even after 30 washing cycles.