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Propranolol–HCl-loaded calcium alginate (ALG) beads, propranolol–resin complex (resinate)-loaded calcium alginate (RALG) beads and polyethyleneimine (PEI)-treated RALG (RALG–PEI) beads were prepared by ionotropic gelation/polyelectrolyte complexation method. The beads were evaluated and compared in respect of drug entrapment efficiency (DEE) and release characteristics in simulated gastric fluid (SGF, 0.1(N) HCl, pH 1.2) and simulated intestinal fluid (SIF, phosphate buffer, pH 6.8). DEE of RALG beads was considerably higher than that of ALG beads containing unresinated drug. However, DEE of RALG beads decreased with increase in both gelation time and concentration of the gel forming Ca2+ ions due to drug displacement from resinate. PEI treatment of RALG beads further decreased DEE as the polycation also displaced the drug from the resinate. The release of drug from all the beads was slow and incomplete in SGF owing to considerably less swelling of the beads and the decrease in drug release from the beads followed the order: RALG–PEI < RALG < ALG. In contrast to rapid discharge of the drug by ALG beads in SIF, RALG beads provided marginal prolongation in drug release as both ALG and RALG beads swelled and eroded rapidly although at different rates. On the other hand, drug release from RALG–PEI beads in SIF was considerably prolonged for different periods of time depending upon the conditions of PEI treatment. Interaction of the polycation with alginate resulted in the formation of polyelectrolyte complex membrane as evident from scanning electron microscopy (SEM), differential scanning calorimetry (DSC) and fourier-transform infrared spectroscopy (FTIR) studies. The membrane having reduced swelling and erosion properties behaved as a physical barrier to drug release. Kinetics of the drug release also confirmed the formation of physical barrier as anomalous transport type of release associated with. RALG beads tended to shift towards Fickian transport in case of RALG–PEI beads.