Present research work was focused to enhance bioavailability and reduce the short half life problem of Furosemide by preparation of sustained release microcapsule. Cellulose acetate microcapsules were prepared by co-acervation phase separation technique and phase separation was induced using distilled water. Prepared microcapsules were evaluated for Particle Size Analysis, Flow properties i.e. Angle of Repose Carr’s Index and Hauser’s Ratio, Scanning Electron Microscopy, Coating Wall Thickness, Drug Content and Microencapsulation efficiency, Dissolution studies. All the studies were performed in triplicate and standard deviation was calculated.   Key Words: Furosemide, Microcapsules, co-acervation phase separation technique.