Gellan gum beads containing cephalexin were prepared by extruding the dispersion of cephalexin and gellan gum into a solution containing a mixture of calcium and zinc ions (counterions). Beads were prepared by changing experimental variables such as pH of the counterion solution and amount of cephalexin loading in order to optimize process variables on the final % drug entrapment efficiency, release rates, size, and morphology of the beads. Absence of chemical interactions between drug, anionic polymer, and counterions after production of beads was confirmed by Fourier transform infrared spectroscopy. Differential scanning calorimetry was used to understand the crystalline nature of the drug after its successful entrapment. These data indicated the amorphous dispersion of cephalexin in the polymer matrix. Beads were spherical in shape, with the average bead size ranging from 925 to 1183 microm as measured by the laser light scattering technique. Cephalexin entrapment of up to 69.24% was achieved. In vitro release studies were performed in 0.1 N HCl or pH 7.4 phosphate buffer and the release of cephalexin was achieved up to 6 h. Dynamic swelling studies were performed in 0.1 N HCl or pH 7.4 phosphate buffer. Diffusion coefficients were calculated for spherical geometry. The release data have been fitted to an empirical relation to estimate the transport parameters. Mathematical modeling studies were performed for spherical geometry by solving Fick's equation to compute concentration profiles. These results were correlated with the release profiles.