An attempt was made to formulate mesalamine-loaded alginate microspheres by emulsion cross linking method for local treatment of ulcerative colitis. Microspheres were filled in HPMC capsules enteric coated with Eudragit FS-30D. The effect of process variables like drug-alginate concentration ratio and emulsifier concentration was optimized. Microspheres were evaluated for particle size, shape and entrapment efficiency. Spherical shaped microspheres were confirmed by scanning electron microscopy. In vitro drug release study showed a burst drug release pattern in the initial hour necessitating encapsulation of alginate microspheres. In vivo study in rats performed by colonic inflammatory lesions demonstrated remarkable reduction in ulcer index treated with microspheres. Histopathological study confirmed no signs of ulceration or bleeding. Microspheres (drug:alginate concentration, 1:1) was then filled in HPMC capsule shells, enteric coated with Eudragit FS 30D to gain 30 mg weight. Due to solubility of Eudragit FS30D above pH 7, an encapsulated system released alginate microspheres at colon region. Capsules with weight gain of 30 mg coating polymer (B3) resisted the drug release at intestinal region for about 6 h with 10% drug release. In vitro drug release of formulation B3 showed 64.89 and 90.52% drug release within 10 h, in phosphate buffer pH 7.4 and in presence of rat faecal content in simulated colonic fluid, respectively. The later rapid drug release was due to action of colonic microflora at alginate microspheres. Therefore, mesalamine-loaded alginate microspheres enteric coated in HPMC capsules can be potential delivery system for local treatment of ulcerative colitis.