Methotrexate (MTX) loaded chitosan and chitin microspheres were prepared. The physicochemical characteristics were affected by various parameters, e.g. stirring speed, concentration of chitosan and chitin. The t(1/2) for in vitro release varied depending on the concentration of chitosan and chitin and the amount of glutaraldehyde used. The antitumour activity in Ehrlich ascites tumour bearing mice for MTX loaded chitosan microspheres was better when compared with plane MTX on oral administration. The plasma drug levels were sustained.