Where you are using a client to communicate (send / receive) with your mail server and as long as you are communicating over https (webmail) or secure SMTP / POP3 / IMAP (thick client) then the email is encrypted in transit. Assumming that communication between your mail server and the target mail server is also encrypted, as is the communication between the target mail server and the final recipient, then the email is effectively encrypted in transit over the internet. However, the contents of the email are probably not encrypted on the mail servers themselves, so possibly vulnerable to access by 3rd parties (whether by hackers or government / security agencies).
If you use an encrypted email system, then the content is encrypted at all times (doubly so in transit), so it is only accessible by the sender and the recipient with the correct encryption key. In theory, PKI should be an open standard, so that as long as the sender has the recipient's public key they should be able to send an encrypted message to the recipient who decrypts it with their private key. However, in practice it is a lot harder to get interoperability unless both parties are using the same email system.