The effect of four formulation and processing variables, calcium concentration, drying condition, concentration of hardening agent and hardening time on the bead properties and the release characteristics of a model drug from calcium pectinate gel (CPG) beads were studied. A poorly soluble compound, indomethacin, was used as the model drug. The investigated variables affected the bead size, the entrapment efficiency and the release of indomethacin from CPG beads. Drug release was found to be a function of the formulation and processing variables. The slower drug release was achieved from the formulations with higher calcium concentration, higher concentration of hardening agent and longer hardening time. The drying condition, however, did not influence the drug release. The mechanism of indomethacin release from CPG beads followed the diffusion controlled model for an inert porous matrix. All drug release data fitted well to the Higuchi square root time expression.