This work investigates preparation of biodegradable beads with alginate polymer by ionotropic gelation method to take the advantages of the swelling and mucoadhesive properties of alginate beads for improving the oral delivery of the antidiabetic agent gliclazide. It demonstrates that the ionic gelation of alginate molecules offers a flexible and easily controllable process for manipulating the characteristics of the beads which are important in controlling the release rate and consequently the absorption of gliclazide from the gastrointestinal tract. Variations in polymer concentration, stirring speed, internal phase volume and the type of surfactant in the external phase were examined systemically for their effects on the particle size, incorporation efficiency and flow properties of the beads. The swelling behavior was strongly dependent on the polymer concentration in the formulations and the pH of the medium. The in vitro release experiments revealed that the swelling is the main parameter controlling the release rate of gliclazide from the beads. In vivo studies on diabetic rabbits showed that the hypoglycemic effect induced by the gliclazide loaded alginate beads was significantly greater and more prolonged than that induced by the marketed conventional gliclazide tablet (Gliclazide). The results clearly demonstrated the ability of the system to maintain tight blood glucose level and improved the patient compliance by enhancing, controlling and prolonging the systemic absorption of gliclazide.