The aim of the study was to provide a controlled release system, which could be used for the oral administration of highly water-insoluble drugs. Pellets have been prepared by extrusion/spheronization containing two model drugs (methyl and propyl parabens) of low water solubility. One type of pellets contained the drugs mixed with lactose and microcrystalline cellulose (MCC) and the other types of pellets contained the model drugs dissolved in a self-emulsifying system (4.8%) consisting of equal parts of mono-diglycerides and polysorbate 80 and MCC. Pellets of all types in the same size fraction (1.4-2.0 mm) were coated to different levels of weight gain, with ethylcellulose, talc and glycerol. A sample of pellets containing methyl parabens in the self-emulsifying system was pre-coated with a film of hydroxypropylmethyl cellulose from an aqueous solution and then coated as above. Dissolution experiments established that the presence of the self-emulsifying system enhanced the drug release of both model drugs and that the film coating considerably reduced the drug release from pellets made with just water, lactose and MCC. The coating reduced the drug release from the pellets containing the self-emulsifying system to a lesser extent but in relation to the quantity of coat applied to the pellets. The application of a sub-coating of hydroxypropylmethyl cellulose was able to reduce the release rate of methyl parabens self-emulsifying system ethyl cellulose coated pellets. Thus, the formulation approach offers the possibility of formulating and controlling the in vitro release of water-insoluble drugs from solid oral dosage forms.