This work presented the development of new cross-linked xanthan gum based biodegradable polymeric system, characterization of their properties and investigation in its potential role for controlled delivery of antiviral drug acyclovir (ACV). Xanthan gum hydrogel formulations (FXG1-FXG9) were developed with different ratio of xanthan gum (XG), acrylic acid (AA), hydroxyethylmethacrylate (HEMA) and methylenebis-acrylamide (MBA). The structures of the hydrogels were characterized by fourier transform infrared spectroscopy (FTIR), thermal analysis, powder X-ray diffraction analysis (PXRD) and scanning electron microscopy (SEM). The swelling characteristics and drug release profile of hydrogels were investigated by varying formulation reactants concentration, cross-linking density, pH of the medium and ionic strength. At pH 7.4, the maximum drug release profile observed in formulation FXG3 was 88.51%, while this value approached to 28.07% at pH 1.2 in simulated gastrointestinal fluid period of 24 h study. The results implicated that the developed hydrogels are potential candidate as drug carrier in controlled release formulations.