Abstract Gellan gum (GG) microbeads containing tranexamic acid (TA), an anti-fibrinolytic drug were prepared by a classic sol–gel transition induced by ionic crosslinking technique using aluminum chloride (AlCl3) as cross-linking agent. The influence of different formulation variables on in vitro physico-chemical parameters and drug release studies were performed systematically. The microbeads were evaluated by scanning electron microscopy (SEM), Fourier transform infra-red (FTIR) spectroscopy, X-ray diffraction (XRD), differential scanning calorimetry (DSC) and high performance liquid chromatographic (HPLC) analysis. Particle size and swelling behavior of microbeads were also investigated. Microbeads showed improved drug encapsulation efficiency along with enhanced drug release. The in vivo studies exhibited sustained drug release in rabbits over a prolonged period after oral administration of these newly developed TA loaded GG microbeads. Based on the results of in vitro and in vivo studies in experimental animal model it was concluded that these microbeads provided intestinal specific controlled release of TA.