Abstract Glyceryl monooleate is a Food and Drug Administration-approved food additive which has the ability to form various liquid crystalline phases in the presence of various amounts of water. The unique properties of the cubic liquid crystalline phase that result upon the presence of excess body fluids at body temperature were utilized to formulate an oral dosage form containing furosemide as the model drug. The aim was to develop a formula, which has both bioadhesive and sustained release properties of the resultant cubic phase, so that increasing gastric residence time to improve bioavailability of the drug and at the same time obtaining a sustained action. The system was found to be affected by the limited solubility of furosemide in both the carrier system and the pH of surrounding medium. As a consequence, the addition of some solubility modifiers was investigated in order to obtain the desired properties of the expected liquid crystalline system.