A novel liposome-in-microsphere (LIM) formulation has been created comprising drug-loaded liposomes within pH responsive Eudragit S100 microspheres. The liposomes contained the model drug 5-ASA and were coated with chitosan in order to protect them during encapsulation within the microspheres and to improve site-specific release characteristics. In vitro drug release studies showed that LIMs prevented drug release within simulated stomach and small intestine conditions with subsequent drug release occurring in large intestine conditions. The formulation therefore has potential for oral colonic drug delivery.