pH-Responsive hydrogels are the current need of the hour in controlled drug delivery applications, pH-sensitive interpolymeric hydrogels based on chitosan and polyvinyl alcohol cross linked with glutaraldehyde were synthesized Preformed inclusion complex of naproxen with beta-cyclodextrin (1:1) was directly loaded into the hydrogel. The hydrogels exhibited maximum swelling at neutral pH. They showed negligible drug release in the simulated gastric fluid and sustained release in the intestinal fluid. The preliminary kinetic analysis revealed that cyclodextrin influences the relaxation rate of the polymer chains, leading to slower release of the drug. It can be proposed that the deleterious effects of naproxen on the epithelium of the gastrointestinal tract could be minimized by using the cyclodextrin containing hydrogels as drug delivery systems because they provide a controlled release resulting in a reduced concentration of free naproxen. Further, the pH-specific release behavior of these hydrogels can be utilized for colon-targeted drug delivery.