The present investigation was to formulate theophylline loaded microspheres using different grade of chitosan, chitosan - sodium alginate and chitosan-albumin by the following methods such as phase separation emulsification, modified ionotropic gelation and heat stabilization method. The prepared microspheres were evaluated in terms of drug content, incorporation efficiency, micromeritic studies, moisture content and in vitro drug release profile. Chitosan –sodium alginate combination produced microspheres with spherical, smooth surface and frees flowing. It exhibited incorporation efficiency above 75% and size range between 999-994 μm. The drug release from the microspheres follows first order kinetics and the mechanism is Higguchi’s diffusion. Theophylline loaded microspheres prepared from Chitosan–sodium alginate combination exhibited good sustained release characteristics and was found suitable for chronic obstructive pulmonary disease (COPD) and nocturnal asthma.