In the present study, the microwave induced synthesis of polymethacrylamide-grafted-gellan gum (PMaa-g-GG) was carried out by free radical initiation using cerric (IV) ammonium nitrate (CAN) as redox initiator. Concentrations of methacrylamide (Maa), CAN and microwave irradiation time were taken as variable synthetic parameters. The modified polysaccharide obtained from different synthetic conditions was then characterized by FTIR, CHN analysis, DSC and powder X-ray diffraction. The yield and extent of grafting were assessed by determining percentage grafting, percentage grafting efficiency, percentage conversion and these were correlated with elemental analysis. The acute oral toxicity study of modified polysaccharide was performed as per OECD guideline. Histological comparison of different organs between control and test animal showed no significant difference. Sustained release tablets of diclofenac sodium (DS) were prepared with modified gellan. In vitro dissolution study showed the tablets were capable of releasing the drug over a period of 8 h.