In the present investigation should be microspheres loaded with donepezil hydrochloride (DP) were prepared by water-in-oil emulsion technique using sodium alginate as a hydrophilic carrier. Microspheres were characterized by Fourier transform infrared spectroscopy (FTIR), differential scanning calorimetry (DSC) and scanning electron microscopy (SEM). Swelling experiments were performed to compute the diffusion coefficients and molecular mass between cross-links of the microspheres. In vitro release studies have been performed in 1.2 and 6.8 pH media. Effect of variables such as cross-linker concentration, time of cross-linking, drug/polymer (d/p) ratio on the release, percentage entrapment efficiency, particle size and swelling capacity were determined. The highest donepezil hydrochloride release percentage was obtained as 99.8 % for the cross-linker concentration of 3 % (w/v), drug/polymer ratio of 1/4 (w/w) at the end of 4 h in 6.8 media. The release rates were fitted to an empirical equation to compute the diffusional exponent which indicated non-Fickian transport.