Abstract: A new emulsion-gelation method was used to prepare oil (soyabean and mustard oil) entrapped diclofenac sodium beads using sodium alginate as the polymer. The prepared beads were evaluated by their morphological, physical and release parameters. From the result, it was seen that in 30% soyabean oil containing beads oil droplets were distributed in uniform size in the beads than the mustard oil. Most of the beads of F-1, F-3 and F-7 were broken down in pH 7.4 phosphate buffer rather than in 0.1 N HCl. Among the seven formulations, 30% soyabean oil and mustard oil containing beads were present in floating condition up to 24 h in pH 7.4 phosphate buffer, 0.1 N HCl and 0.9% NaCl media. Beads were found to be fragmented in buffer from the beginning but not in 0.9% NaCl medium. The mean diameters of the beads were increased with the increased concentration of oils. With the incorporation of oil, rate retarding actions of the beads were increased. The release pattern of all formulation were fitted to zero order model and the release exponent showed the release mechanism was non-fickian or anomalous. Finally, it can be concluded that highest oil containing beads showed most rate retarding activities and mustard oil was most sustaining than soyabean oil.