The purpose of this study was to apply factorial design in order to determine the influence of the formulation factors and their interactions on several responses such as particle size, dissolution behaviour at pH 1.2 and pH 7.4 as well as production yield, during the development of budesonide loaded, chitosan coated Ca-alginate microparticles (MPs) intended for treatment of inflammatory diseases in the gastrointestinal tract. Produced drug-loaded MPs were spherical in shape, had smooth surfaces with low porosity and size range between 5 and 11 mu m. Production yield for the formulations from the design varied from 19% to 50%. Optimisation was performed using central composite design setting the targets: particle size at 5.5 mu m, maximised yield, suppressed dissolution at pH 1.2 and sustained release at pH 7.4. The optimised batches were identified with a combined desirability value of 0.967.