Graft copolymer of sodium alginate (SA) with N-vinyl-2-pyrrolidone (N-VP) was prepared using potassium persulphate (PPS) as an initiator. The effect of monomer content on the percentage of graft yield was investigated. It was observed that N-vinylpyrrolidone (N-VP) content has remarkable influence on the percentage graft yield. SA and their graft copolymer (SA-g-VP) beads were prepared in various formulations using glutaraldehyde (GA) as a cross-linking agent and acebutolol hydrochloride (ABHCl) as a model drug. Beads were characterized by Fourier transform infrared spectroscopy (FT-IR), scanning electron microscopy (SEM), and differential scanning calorimetry (DSC). Chemical stability of ABHCl after encapsulation into beads was confirmed by FT-IR analysis. Preparation conditions of the SA-g-N-VP beads were optimized by considering the percentage entrapment efficiency, particle size, swelling capacity, and their release data. In vitro release studies of different formulations were performed at 37 degrees C in an intestinal fluid atmosphere (pH 7.4). The effect of graft copolymer, cross-linker and drug concentrations on the release of ABHCl was discussed. It was observed that ABHCl release from the beads increased with the increasing N-VP upto 30%, and then decreases beyond this concentration. It was also observed that, as GA and ABHCl concentration increases, rate of drug release decreases. The highest ABHCl release upto 12 h was obtained is 98.5%% for beads cross-linked with 0.5 mL GA containing 10% monomer and 10% ABHCl. From these studies, it was observed that SA on grafting with N-VP showed variation in drug release profiles. (c) 2011 Wiley Periodicals, Inc. Adv Polym Techn 32: 8799, 2011; View this article online at wileyonlinelibrary.com. DOI 10.1002/adv.20238