This study addresses how to mask the undesirable taste of diclofenac sodium (DS) without interfering with an adequate rate of drug release. DS microcapsules were successfully prepared using a system of ethylcellulose (EC) - toluene - petroleum ether. The system was optimized by the construction of the phase diagram and determination of the amount of EC precipitated under different solvent: non-solvent ratios to determine the most appropriate conditions for preparing good microcapsules. Microcrystalline cellulose (Avicel) and lactose were mixed with DS powder and converted into spherical cores by the wet agglomeration technique which facilitated coacervation and formation of thin and uniform microcapsule walls. Diethylphthalate (DEP) and Polyethyleneglycol 600 (PEG) in different concentrations (20 or 40% w/w) were used as plasticizers to impart better elasticity to the microcapsules. The microcapsules were evaluated for DS released against crushed commercial DS enteric coated tablet (Voltaren). The prepared microcapsules were taste evaluated by a taste panel of 10 volunteers. The results revealed that the optimum solvent: non-solvent ratio required for microcapsule formation was 1: 2. Microcapsules containing PEG 20% or DEP 40% showed a faster rate of DS release compared to that obtained from other microcapsules and crushed commercial enteric coated tablets (Voltaren). The palatability and the taste of DS were significantly improved by microencapsulation. The extent of taste masking was influenced by the microcapsule core: wall ratio, the presence of additives within the core, the type and concentration of plasticizer and initial core size.