Diclofenac sodium was formulated as novel enteric microcapsules for improved delivery to the intestine using the polymers cellulose acetate phthalate (CAP) and ethyl cellulose (EC). The enteric coating was given using an innovative technique combining the wet granulation and thermal change methods. The novel process was analysed for its capability to produce microcapsules of uniform size, good flowability, uniform drug loading and maximum entrapment efficacy and the absence of interaction between drug and process parameters as well as the polymers. In vitro release study was carried out in simulated gastric fluid (SGF) for first 2 h and simulated intestinal fluid (SIF) for next 6 h. The best formulation that contained cellulose acetate phthalate and ethyl cellulose in the concentration of 10:90 at 1:1.5 drug–polymer ratio (B3) was further evaluated using in vivo for its pharmacodynamic efficacy and ulcerogenicity. In addition to sustained and uniform release of drug, the formulation B3 showed better anti-inflammatory activity than the marketed formulation and retarded drug release in the gastric medium. The biological examination of incised stomach showed no histological alterations in term of mucous surface cells and glands.