The stable fly, Stomoxys calcitrans (Diptera: Muscidae), is one of the most important pests of cattle and costs U.S. cattle producers billions of dollars in losses annually. In this study, the efficacy of catnip oil encapsulated in gelatin in oviposition deterrence and larval growth inhibition in stable flies was examined under laboratory conditions. More than 98% inhibition of stable fly larval growth and female oviposition was observed in larval and oviposition media treated with encapsulated catnip oil (0.5 g). Further, dose–response tests showed that as little as 0.1 g of encapsulated catnip oil provided >85% oviposition deterrence. The release of nepetalactones from the capsules was more rapid when the capsules were placed on a moist substrate rather than a dry substrate. Encapsulated catnip oil also exhibited antibacterial activity, supporting the hypothesis that its inhibition of larval growth may be based on its killing of the bacteria on which larvae feed. The use of encapsulated catnip oil can provide an alternative control strategy for stable fly management.