To develop a valsartan-loaded gelatin microcapsule using hydroxypropylmethylcellulose (HPMC) as a stabilizer, which could improve the physical stability and bioavailability of valsartan, the gelatin microcapsules were prepared with various ratios of gelatin and HPMC using a spray-drying technique. Their solubility, dissolution, thermal characteristics, crystallinity, and physical stability were investigated. The bioavailability of drug in valsartan-loaded microcapsule was then evaluated compared to drug powder and commercial product in rats. The microcapsule with gelatin and/or HPMC enhanced the solubility and dissolution of drug compared to valsartan powder. Among the formulations tested, the valsartan-loaded gelatin microcapsule at the weight ratio of valsartan/gelatin/HPMC of 1/2/1 gave excellent drug solubility of approximately 2 microg/ml and dissolution of 70% at 1 h. The crystal state of valsartan in this microcapsule was changed from crystalline to amorphous form during the spray-drying process and maintained as an amorphous form at 40 degrees C for at least 3 months, indicating that it was physically stable. HPMC in this microcapsule could inhibit the recrystallization, resulting in stabilizing the amorphous form of valsartan. Furthermore, it improved the oral bioavailability of valsartan compared to valsartan powder and gave the similar AUC, C(max), and T(max) values to commercial product, suggesting that it was bioequivalent to commercial product in rats. Thus, the gelatin microcapsule with HPMC would be a more effective and stable oral delivery system of poorly water-soluble valsartan.