The objective of the present study was to develop and evaluate an oral floating in situ gel of leflunomide (LEF) as liquid gastroretentive drug delivery system for treatment of Juvenile Rheumatoid Arthritis (JRA) to improve patient compliance, prolong its gastric residence time, and reduce the variations of drug concentration in plasma. LEF is a disease modifying anti-rheumatic drug (DMARD) which effectively reduces the signs and symptoms of active JRA in children and rheumatoid arthritis (RA) in adults. Floating in situ gelling formulations were prepared using different concentrations of sodium alginate and calcium carbonate. The prepared gels were characterized for viscosity, drug content, pH, density, in-vitro gelling capacity, floating lag time, floating duration, gelling strength and in-vitro release study. The formula C4 (containing 1.5% w/v sodium alginate and 1% w/v calcium carbonate) was considered the best formula since it showed minimum floating lag time (40 sec), optimum viscosity (295.4 cps), and gel strength (45 sec) and has optimum drug release (98%) for more than 6hr. Therefore, this formula was chosen for further ex-vivo study in rats to detect gel formation in the stomach. Formula C4 showed good gel formation ex vivo study. Hence, floating in situ gelling system of LEF is considered a novel approach to increase patient compliance and increase gastric residence time of drug in the stomach, which in turn will maintain its plasma level.