Objective of present study was to investigate the compatibility of carvedilol with chitosan and study the formulation factors like concentration of tri-polyphosphate (TPP) and curing time to establish a feasible range for these factors to formulate floating chitosan beads of carvedilol. Floating beads were prepared by ionic cross linking of 2% w/v chitosan solution containing suspended drug, with TPP. Use of an acidic TPP solution offered denser cross linking. Formulations were prepared with varying concentration of tri-polyphosphate (0.5, 1.0, 1.5, 2.0, 3.0, 6.0, 8.0, 10.0, 12.0 and 14.0% w/v) keeping the curing time constant at 30 min, to study the feasible range of TPP that can be used. Similarly, formulations were prepared with varying the curing time (5, 10, 20, 30, 40, 80, 90, 100 and 120 h) keeping the concentration of TPP constant at 6.0% w/v, to study the feasible range of curing time. It was concluded that a minimum of 2% w/v of TPP and 30 minutes of curing time is required to form stable beads. The maximum concentration of TPP was observed to be 10% w/v, as any higher concentration of TPP forms brittle beads. Compatibility of carvedilol with chitosan and formulation process was established using Fourier transform infrared spectroscopy (FTIR) and Differential scanning calorimetric (DSC). Scanning electron microscopic examination of the surface and cross section of the beads revealed the pores, which offer immediate buoyancy to the beads. Thus, a feasible range of process parameters for formulation of floating chitosan beads was established.