Mucoadhisive microcapsules are proposed for the antidiabetic drug glipizide, to obtain controlled release. Glipizide microcapsules with a coat consisting of alginate and gum kondagogu were prepared by employing ionic gelation process and emulsification ionotropic gelation process. The microcapsules were evaluated for flow properties, Carr’s index, hausner ratio, micro encapsulation efficiency, drug release characteristics, surface characteristics; compatibility studies mucoadhesive properties and in-vivo hypoglycemic activity. As hausner ratio was less than 1.25 and Carr’s index values were less than 16 from both the methods, hence they were found to be free flowing. Sharp endothermic peaks were noticed from the microcapsules formulated with two different techniques at 215ºC indicating the compatibility between the drug and the polymer gum kondagogu. Glipizide release from the microcapsules was slow and followed zero order kinetics (r > 0.98) and followed non– fickian (n value 0.5 to 1) release and depended on the coat: core ratio and the method employed in the preparation of microcapsules. Among the two methods emulsification ionotropic gelation method was found to be more suitable for slow and complete release of glipizide over a long period of time. These microcapsules exhibited good mucoadhesive property in the in-vitro wash-off test.