We have developed a self-healing membrane based on microcapsules prefilled with Nafion solution. The microcapsules are designed to rupture when they encounter defects formed in the membrane such as cracks and pinholes, and then release the prefilled Nafion solution to heal the defects in-situ. A procedure was developed to prepare microcapsules with a urea-formaldehyde shell prefilled with a Nafion/tributyl phosphate self-healing solution. The prepared microcapsules were characterized by SEM with focused ion beam (FIB) and optical microscopy. Proton conductivity, mechanical properties, swelling and water uptake of the composite membranes based on microcapsules were measured and compared with that of pure recast Nafion membranes. Fuel cell performance with 6 and 10 wt% microcapsules/Nafion membranes was compared with that of a pure recast Nafion membrane. Durability testing comprising 220 hours of OCV-hold with relative humidity cycling confirmed that the self-healing functionality could greatly extend the life span of the fuel cell membrane.