Theophylline is the most useful bronchodilators for the treatment of severe reversible bronchospasm. The fluctuations of serum theophylline level in clinical practice and associated central nervous system side effects necessitate the development of an extended release formulation. In the present study, theophylline-loaded beads were prepared by extruding the dispersion of theophylline, sodium alginate, and glycerol into the cationic crosslinking solution of calcium chloride. The effect of the addition of glycerol was determined by entrapment efficiency, drug release, and morphology of beads. Absence of chemical interaction between drug, polymer, and counterions after production of beads was confirmed by Fourier transform infrared spectroscopy. Theophylline entrapment of up to 72% was achieved in beads with almost spherical shape and size ranging from 0.67 to 1.12mm. Percentage entrapment of theophylline found to be more and release was extended up to the eleventh hour from the glycerol containing sodium alginate beads. Hence, sodium alginate glycerol beads could represent a promising oral drug delivery system to extend the release of theophylline.