At present, the use of huge quantities of synthetic pesticides in conventional agriculture has lead to some major environmental problems. Natural pesticide are now being developed to avoid such problems. Neem (Azadirachtin A) seed oil hereafter designated as neem Aza-A, is one such natural pesticide known to be a powerful insect antifeedant and growth-regulating substance yet limited in application because of its rapid degradation in the environment. Therefore, encapsulation of neem Aza-A within membranes to control its release and improve its stability in the environment may improve its effectiveness. Controlling the release of the pesticide was achieved by utilization of glutaraldehyde-alginate gel capsules modified by coating with a natural rubber (NR) layer. The optimization of the properties of the neem Aza-A containing beads was achieved by changing variables such as the extent of crosslinking, the amount of loading and NR layer. The SEM data indicated that the walls of the beads are smooth and nonporous. The swelling results indicated that swelling of the polymeric beads decreased with increasing exposure time to glutaraldehyde and reduced the rate of release of the pesticide. The data on the rate of release of neem Aza-A from the differently prepared capsules into an aqueous environment was analyzed by HPLC and fitted into an empirical equation to estimate the kinetic parameter. The degree of release of neem Aza-A from capsules was controlled by their condition of formation.