A multiple unit oral floating drug delivery system of famotidine was developed to prolong gastric residence time, target stomach mucosa and increase drug bioavailability. Drug and polymer compatibility was studied by subjecting physical mixtures of drug and polymers to differential scanning calorimetry. Cod liver oil entrapped calcium alginate beads containing famotidine, capable of floating in the gastric condition were formulated and evaluated. The gel beads were prepared by emulsion gelation method by employing sodium alginate alone and mixture of sodium alginate and hydrophilic copolymers such as carbopol 934P and hydroxypropylmethylcellulose K15M grade in three different ratios. The effect of selected factors, such as percentage of oil and amount of copolymers on floating properties was investigated. The beads were evaluated for percent drug loading, drug entrapment efficiency, buoyancy and in vitro drug release. The in vitro drug release study of the beads was carried out in simulated gastric media employing a modified Rosette-Rice test apparatus. Wherein, the apparatus was further modified by incorporating a water jacket to the apparatus to circulate hot water to maintain 37±2° for throughout the release study. All the oil entrapped calcium alginate beads floated if a sufficient amount of oil was used. Beads formulated employing sodium alginate alone could not sustain the drug release up to 8 h, whereas beads formulated with mixture of sodium alginate and copolymers demonstrated sustained release of famotidine up to 8 h. The results suggested that cod liver oil entrapped calcium alginate beads were promising as a carrier for intragastric floating drug delivery of famotidine.