Graft copolymers of sodium alginate (NaAlg) with N-vinyl-2-pyrrolidone were prepared using azobisisobutyronitrile as initiator. The graft copolymers (NaAlg-g-PVP) were characterized with Fourier transform infrared spectroscopy, elemental analysis, and differential scanning calorimetry. Polymeric hydrogel beads of NaAlg and NaAlg-g-PVP were prepared by crosslinking method Using glutaraldehyde (GA) as a crosslinker in the hydrochloric acid catalyst (HCl) and these beads were used to deliver anti-inflammatory drug, indomethacin (IM). Chemical stability of the IM after encapsulation into beads was confirmed by FTIR. Preparation conditions of the NaAlg-g-PVP beads,ere optimized by considering the percentage entrapment efficiency, particle size, swelling capacity and their release data. In vitro release Studies were performed in simulated gastric fluid (pH 1.2) for the initial 2 h, followed by simulated intestinal fluid (pH 7.4) for 4 h. Effects of GA concentration, exposure time to GA, drug/polyrner (d/p) ratio, and concentration of HCl on the release of IM were discussed. It was observed that IM release from the beads decreased with increasing GA concentration and exposure time. IM release also decreases with increasing till) ratio and HCI concentration. The highest IM release was obtained to be 77%, for beads crosslinked with 0.027M GA. Swelling experiments were also performed to compute molecular mass between crosslinks of the beads. (c) 2008 Wiley Periodicals, Inc.