Continuous medium exchange within a microchannel represents a highly sought-after technique in functionalizing micro-objects with coating layers, enabling a myriad of applications ranging from biomedical engineering to materials science. Herein, we introduce a unique medium exchange approach, namely, tilted-angle dielectrophoresis, to accomplish layer-by-layer (LbL) coating on droplets in a wide microchannel. Pairs of adjacent tilted parallel electrodes arranged in a zigzag fashion are exploited to consecutively and repeatedly guide particles/droplets travelling through three parallel laminar streams comprising two reagents and a washing buffer. The performance of medium exchange is demonstrated using PS microparticles and oil droplets. We show that multi-cycle medium exchange, droplet transfer accompanied with purification, and multi-mode medium exchange around different micro-objects are achieved by conveniently regulating the applied voltage and the inlet flow rate, indicating a flexible, versatile and label-free alternative for characterizing and handling colloidal particles. Furthermore, LbL coating on droplets utilizing the presented strategy is implemented in the parallel coating-chemical and washing streams to obtain multiple layers of microcapsules. The linearly increasing fluorescence intensity of the coated droplets with each subsequent fluorescent coating demonstrates the capability of the tilted-angle dielectrophoretic medium exchanger for on-chip generation of LbL microcapsules on demand. The presented medium exchange strategy, together with its unique features of simple geometric configuration, facile control and multifunctionality, can provide a refined alternative for further expanding the utility scope in functional particles and cells.