In this paper, we present a smart capsule for location-specific drug release in the gastrointestinal tract. Once activated through a magnetic proximity fuse, the capsule opens up and releases its powdered payload in a location specified by an implanted miniature magnetic marker or an externally worn larger magnet. The capsule (9 mm × 26 mm) comprises of two compartments: one contains a charged capacitor and a reed switch, while the second one houses the drug reservoir capped by a taut nylon thread intertwined with a nichrome wire. The nichrome wire is connected to the capacitor through the reed switch. The capacitor is charged to 2.7 V before ingestion and once within the proximity of the permanent magnet; the reed switch closes, discharging the capacitor through the nichrome wire, melting the nylon thread, detaching the cap, and emptying the drug reservoir.