Exopolysaccharides (EPS) are high-molecular-weight polymers, excreted by some microorganisms onto the outside of their cell walls. EPS are primarily composed of carbohydrate and some non-carbohydrate substituents, such as acetate, phosphate, pyruvate and succinate. The study was aimed at isolation of EPS from pseudomonas strains and milk samples and also preliminary trials were carried with sea water, sea sediment and soil samples. Based on the trial study pseudomonas and milk sample (lactobacilli) were selected for EPS production. The pseudomonas strains were then subcultured in cetrimide media and lactic acid bacteria strains were subcultured in milk media (50%) supplied with 50% carbohydrate source maintained at 20º C for 72 hours. The EPS obtained from milk sample was highly viscous in nature, good smelling and high yield. The EPS obtained from pseudomonas strains didn't show satisfactory yield. The EPS obtained from lactobacilli was characterized and used as gelling agent in formulating a Diclofenac diethylamine gel. The formulated gel was evaluated and compared to marketed formulation for gelling agent, consistency and performance.